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U.S. credit rating faces new scrutiny

@CNNMoney November 22, 2011: 9:53 AM ET

NEW YORK (CNNMoney) -- The sovereign credit rating of the United States is under review by Fitch Ratings after a Congressional super committee failed to reach agreement on reducing the nation's budget deficit.

But Standard & Poor's said the super committee's lack of accord will not affect its rating on U.S. debt, which it had already downgraded in August.

The super committee called it quits Monday without reaching any agreement on debt reduction. In order to stave off automatic spending cuts, the committee had to come up with a deal to cut $1.2 trillion by Nov. 23.

The end of the talks "underscores the challenge of securing the political consensus on how to reduce the federal budget deficit and place U.S. public finances on a sustainable path over the medium term," said Fitch on Monday.

S&P lowered the U.S. rating to AA-plus from the perfect AAA in August, and said the outlook was negative.

While not changing that rating in the wake of the super committee's failure, the agency said there was reason for caution.

"We expect the caps on discretionary spending as laid out in the Budget Control Act of 2011 to remain in force," said S&P. "If these limits are eased, downward pressure on the ratings could build."

The third rating agency, Moody's Investor Service, said that it was sticking with its AAA-rating with a negative outlook for the U.S. government, for now.

Moody's said Tuesday that "failure to reach an agreement [by the super committee] would not by itself lead to a rating change for the U.S. government." To top of page

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