U.S. political wrangling over averting the so-called fiscal cliff is unlikely to influence Standard & Poor’s AA+ credit rating on the nation.
“We believe that this characterization still holds,” the New York-based unit of McGraw-Hill Cos. said today in a statement. S&P has a negative outlook of the U.S. rating, as do Moody’s Investors Service and Fitch Ratings, which assign the nation their top grades.
S&P stripped the U.S. of its AAA grade on Aug. 5, 2011, citing the government’s lack of a plan to rein in its debt load and weakening “effectiveness, stability, and predictability of American policy making and political institutions.”
President Barack Obama is meeting today at the White House with congressional leaders as they seek to avoid tax and spending changes that could trigger a recession in 2013.
Failure to reach an agreement would trigger fiscal consolidation that would be “vulnerable to reversal,” S&P said. An agreement this weekend will likely signal “that the tax cuts of 2001 and 2003 are extended for some period and additional measures are insufficient to place the U.S. medium-term public finances on a sustainable footing.”