US debt rating 'under pressure' unless budget deficit fixed: S&P

“Our stable outlook on the 'AAA' rating on the U.S. government assumes that the government will soon reveal a credible plan to tighten fiscal policy to enable the general government debt-to-GDP ratio to stabilize and then to decline in the medium term,” the agency's chief economist Davis Wyss wrote in a report.

“Absent a credible plan, the rating on the U.S. federal government will come under pressure.”

His report evaluated possible repercussions of an extended disagreement in Congress on raising the debt ceiling. He criticized some politicians who threaten to oppose an increase so that the United States spends less.

“It's the wrong way to deal with the national debt. It should be dealt with at its source, which is the budget deficit,” Wyss wrote.

However, Standard and Poor's says Congress is unlikely to go in that direction, which would make it difficult for the United States to continue repaying its debt.

“Default by the U.S. Treasury could cause significant and long-lasting financial and economic disruption,” Wyss wrote. “We don't believe there is a significant chance of this occurring.”

The government is due to present next month its proposed budget, which takes effect in the fiscal year beginning Oct. 1.

President Barack Obama has repeatedly said he would reduce the country's deficit, but that he wants to do so first through economic growth.

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