(CNN) -- The Standard & Poor's rating agency announced Friday that it has downgraded the U.S. credit rating to AA+ from its top rank of AAA.
"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," the agency said about the move, which was announced after the markets had closed.
Fitch and Moody's, the other two main credit ratings agencies, maintained the AAA rating for the United States after this week's debt deal, though Moody's lowered its outlook on U.S. debt to "negative."
A negative outlook indicates the possibility that Moody's could downgrade the country's sovereign credit rating within a year or two.
John Chambers, the head of sovereign ratings at S&P, told CNN that the political brinkmanship over the debt ceiling proved to be a key issue, with "the U.S. government getting to the last day before they had cash-management problems."
Few governments separate the budget process from the debt-authorization process as the United States does, he noted.
And, though the budget deal that finally was reached will deliver at least $2.1 trillion in savings over the next decade, that will not suffice, he said. "It's going to be difficult to get beyond that -- at least in the near term -- and you do need to get beyond that to get to a point where the debt-to-GDP ratio is going to stabilize."
Chambers added that his agency's decision is likely to have a long-term impact. "Once you lose your AAA, it doesn't usually bounce back," he said.
"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," the agency said about the move, which was announced after the markets had closed.
Fitch and Moody's, the other two main credit ratings agencies, maintained the AAA rating for the United States after this week's debt deal, though Moody's lowered its outlook on U.S. debt to "negative."
A negative outlook indicates the possibility that Moody's could downgrade the country's sovereign credit rating within a year or two.
John Chambers, the head of sovereign ratings at S&P, told CNN that the political brinkmanship over the debt ceiling proved to be a key issue, with "the U.S. government getting to the last day before they had cash-management problems."
Few governments separate the budget process from the debt-authorization process as the United States does, he noted.
And, though the budget deal that finally was reached will deliver at least $2.1 trillion in savings over the next decade, that will not suffice, he said. "It's going to be difficult to get beyond that -- at least in the near term -- and you do need to get beyond that to get to a point where the debt-to-GDP ratio is going to stabilize."
Chambers added that his agency's decision is likely to have a long-term impact. "Once you lose your AAA, it doesn't usually bounce back," he said.
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