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WASHINGTON (AP) — Standard & Poor's says it downgraded the U.S. government's credit rating because it believes the U.S. will keep having problems getting its finances under control.
S&P officials on Saturday defended their decision to drop the government's rating to AA+ from the top rating, AAA. The Obama administration called the move a hasty decision based on wrong calculations about the federal budget. It had tried to head off the downgrade before it was announced late Friday.
But S&P said it was the months of haggling in Congress over budget cuts that led it to downgrade the U.S. rating. The ratings agency was dissatisfied with the deal lawmakers reached last weekend. And it isn't confident that the government will do much better in the future, even as the U.S. budget deficit grows.
David Beers, global head of sovereign ratings at S&P, said the agency was concerned about the "degree of uncertainty around the political policy process. The nature of the debate and the difficulty in framing a political consensus ... that was the key consideration."
S&P was looking for $4 trillion in budget cuts over 10 years. The deal that passed Congress on Tuesday would bring $2.1 trillion to $2.4 trillion in cuts over that time.
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