Surprise warning on U.S. debt comes as Washington inches away from gridlock
Standard & Poor’s warning that it could downgrade the AAA rating on U.S. debt in the next two years jolts financial markets. The warning comes even as a new sense of realism emerges in the stalemate between President Obama and congressional Republicans over fiscal policy.
By Don Lee, Tom Hamburger and Tom Petruno
Los Angeles Times
Reporting from Washington and Los Angeles— An unexpected warning about America’s soaring debt jolted financial markets and threatens wider consequences for the U.S. economy, even as a new sense of realism emerges in the stalemate between President Obama and congressionalRepublicans over fiscal policy.
The shot across the government’s bow came from Standard & Poor’s, a leading credit rating firm, which served notice that there was a 1-in-3 chance that it would lower the now-sterling AAA rating on U.S. debt in the next two years.