July 10, 2012 - 5:49 PM
WASHINGTON - Fitch Ratings has retained the U.S. at its top 'AAA' credit rating but also left the outlook negative, citing the failure of Congress and the Obama administration to forge an agreement on reducing the budget deficit.
Fitch says that uncertainty over federal tax and spending policies related to the so-called fiscal cliff "weighs on the near-term economic outlook" and raises the prospect of another recession.
A massive budget showdown could begin after the elections in November and stretch well into next year, despite the threat of the fiscal cliff — $500 billion in impending tax increases and spending cuts.
Fitch also says the burden of government debt on the economy will continue to rise and could hurt growth if an agreement isn't reached on the deficit.
News from © The Associated Press, 2012