Moody`s to review US triple-A debt rating
Baku, July 13 (AZERTAC). Ratings agency Moody`s has said it may cut the US AAA debt rating, citing the "rising possibility" the US will default on its debt obligations.
The agency warned the likelihood the US would fail to raise its statutory debt limit in time to avert default was low but not insignificant.
It came as a fourth day of cross-party talks in Washington on the debt limit were said to have ended stormily.
US Fed chief Ben Bernanke said a default would cause a "major crisis".
Speaking before Congress on Wednesday, the Federal Reserve chairman warned it "would send shockwaves through the entire financial system".
As tough negotiations continue on Capital Hill about raising the debt limit, President Barack Obama reportedly told a top Republican: "Enough is enough."
He made the remark while heatedly rejecting Republican House Majority Leader Eric Cantor`s call for a short-term deal based on spending cuts, according to Democratic officials and Republican aides familiar with the talks.
The tricky negotiations are due to resume on Thursday.
President Obama needs the Republican-led House of Representatives and Democratic-held Senate to sign off a deal to close the US deficit, while allowing Washington to borrow past a 2 August deadline.
He has said he is willing to countenance cuts to social safety-net programmes dear to Democrats, as long as there are tax rises for the rich.
Republicans have rejected the latter proposal, saying that would stifle investment and job growth.
Moody`s became the first of the big three ratings agencies - the others being Standard & Poor`s and Fitch - to place the US`s triple-A rating on review for a possible downgrade.
"The review of the US government`s bond rating is prompted by the possibility that the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes," Moody`s said.
"As such, there is a small but rising risk of a short-lived default."
The US hit its $14.3 trillion (£8.9 trillion) debt ceiling on 16 May, but has since used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating.
When it came to the crunch in the past, Congress regularly voted to raise the debt ceiling, giving government access to the cash it needed.
This year, however, newly empowered Republicans have demanded steep cuts in government spending in return for raising the limit.
Mr Obama has proposed a package of up to $4 trillion in budget deficit reduction over the next 10 years, but Republicans have rejected that and other proposals because it calls for raising taxes.
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