(Press Release) Standard & Poor's Ratings Services today said it affirmed its 'AA+'
long-term and 'A-1+' short-term unsolicited sovereign credit ratings on the United
States of America. The outlook on the long-term rating remains negative. The
transfer and convertibility (T&C)assessment of the U.S. is 'AAA'. Our T&C
assessment reflects the likelihood of official interference in the ability of
U.S.-based public- and private-sector issuers to secure foreign exchange for debt
Our sovereign credit ratings on the U.S. primarily reflect our view of the
strengths of the U.S. economy and monetary system, as well as the U.S.
dollar's status as the world's key reserve currency. The ratings also take
into account the high level of U.S. external debt net of liquid assets; our
view of the recent decline--albeit from a high level--in the effectiveness,
stability, and predictability of U.S. policymaking and political institutions;
and the weakness of recent and expected U.S. fiscal performance.
We see the U.S. economy as highly
diversified and market-oriented, with an adaptable and resilient economic
structure, all of which contribute to strong credit quality...We view U.S.
governmental institutions (including the [Obama] Administration and
Congress) and policymaking as generally strong, although the ability to
implement reforms has weakened in recent years because of a sometimes slow and
complex decision-making process, particularly with regard to broad fiscal
policy direction. In particular, we think that recent shifts in the ideologies
of the two major political parties in the U.S. could raise uncertainties about
the government's ability and willingness to sustain public finances
consistently over the long term. We believe that political polarization has
increased in recent years...
Although the 2012 elections could resolve the U.S. fiscal debate, we see this
outcome as unlikely. If, as commentators currently expect, the election is
close, the race could, in our view, reduce bipartisanship from its already low
level as each side strives to rally support by more clearly distinguishing
itself from the other.