Pressure Mounts to Resolve U.S. Budget Crisis

By David Zeiler

When Standard & Poor's Rating Services Inc. yesterday (Monday) downgraded its outlook on U.S. debt to "negative," it sent the U.S. government a simple message: Deal with your deficits.

The rating agency expressed concern that continued dithering in Washington over how to address the $14 trillion-plus debt and ever-growing annual budget deficits would "render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA' sovereigns" - a hint the United States could lose its AAA rating.

"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," wrote S&P credit analyst Nikola G. Swann.