Moody’s, which placed a negative outlook on the U.S.’s Aaa grade in August, said in a statement today that the rating would likely be cut to Aa1 if negotiations fail to produce such policies. Plans that produce a stabilization and then downward trend in the ratio over the medium term will likely lead to an affirmation of the rating.
The U.S. is on course for a so-called fiscal cliff in which tax cuts enacted under President George W. Bush to expire at the end of this year and for more than $1 trillion of automatic spending reductions to take effect in January.
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