Super-Committee Meltdown Places U.S. Recovery In Jeopardy
Standard & Poor’s said it will keep the U.S. credit rating at AA+, since the committee’s failure triggers $1.2 trillion in automatic spending cuts. If Congress decides to alter those spending limits, Standard & Poor’s will reconsider its rating, Bloomberg reported.
Fitch Ratings said it will review its U.S. credit rating. In August the agency said a failure of the super-committee could trigger a rating downgrade.
Several tax programs, including a payroll tax holiday, may expire Jan.1, putting additional pressure on U.S. consumers.
The Congressional Budget Office estimates that U.S. debt will reach 187% of gross domestic product by 2035.
Analysts now expect a year-long battle in Congress over the spending cuts, half of which are scheduled to affect the nation’s military budget. For investors, that sets the stage for further uncertainty and even less faith that lawmakers can work together to help the nation’s economy.