Ratings agency Standard & Poor’s has lowered its outlook for the U.S. to negative from steady as political leaders struggle to reach an agreement on controlling swelling budget deficits and government debt, according to The Wall Street Journal. On Monday, the agency issued a report maintained the top credit rating for the world’s leading economy, but warned on the country’s rising debt. S&P credit analyst Nikola Swann said, “More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures.”
The agency has forecast that there is a one-in-three chance that the U.S. receives a downgrade to its AAA sovereign debt rating within the next two years, highlighting “a significant risk that Congressional negotiations could result in no agreement on a medium-term fiscal strategy” until after fall 2012 elections. S&P also said, “A delay beyond that time is possible,” and warned that a plan implemented later than the end of 2012 would weaken the U.S. fiscal profile below the levels of other AAA-rated countries.