Standard & Poor’s Ratings Services upgraded its outlook Monday, June 10, 2013, for the US government’s long-term debt but affirmed its credit rating for the country at AA+. AP PHOTO/HENNY RAY ABRAMS
WASHINGTON—Standard & Poor’s affirmed its credit rating for the United States at AA+ on Monday but raised its outlook for the rating from negative to stable.
“We believe that the US monetary authorities have both the strong ability and willingness to support sustainable economic growth and to attenuate major economic or financial shocks,” S&P said.
S&P, however, declined to budge on the main rating, lowered from the top-level AAA in a shock downgrade nearly two years ago.
It said that the US government continues to operate on a high level of debt and that “increased partisanship” and a stiffening ideological divide among policy-makers has prevented establishing a long-term plan to deal with the fiscal deficit challenges.
On the other hand, it said, it does not expect a repeat this year of the impasse on raising the country’s borrowing ceiling that forced the August 2011 downgrade amid worries the country would default on its debt.
“We believe that our current ‘AA+’ rating already factors in a lesser ability of US elected officials to react swiftly and effectively to public finance pressures over the longer term in comparison with officials of some more highly rated sovereigns,” it said.
“And we expect repeated divisive debates over raising the debt ceiling.”
Even so, it said, “Although we expect some political posturing to coincide with raising the government’s debt ceiling… we assume with our outlook revision that the debate will not result in a sudden unplanned contraction in current spending—which could be disruptive—let alone debt service.”