Fitch takes dim view of U.S. deficit

NEW YORK, Nov. 28 (UPI) -- The congressional supercommittee's failure to come to grips with the federal debt led Fitch Ratings to put the U.S. credit rating on a negative outlook Monday.

While the New York firm kept the U.S. government's credit rating at AAA, the negative outlook means there is a better than 50-50 chance the rating could be downgraded during the next two years, Politico reported.

While there's still time for Congress to act and prevent that from happening, The Hill reported, Fitch said its decision to put the U.S. government on notice reflects the firm's "declining confidence" matters will improve.

Standard & Poor's lowered its rating of U.S. debt from AAA to AA+ in August. Another ratings firm, Moody's, also has assigned a negative outlook to the U.S. rating.

Fitch noted in a statement that postponing the tax-and-spend decisions needed to bring the federal deficit under control means stronger actions will be needed later. Continued failure to deal with the deficit would likely result in a ratings downgrade at some point, Politico said.

Fitch said a "credible, medium-term deficit reduction plan" is needed to reverse the "downward pressure" on the nation's credit rating, The Hill reported.

The congressional supercommittee had been charged with coming up with at least $1.2 trillion in deficit reductions. The bipartisan panel's decision last week set up the possibility of automatic defense and social program spending cuts kicking later if Congress doesn't intercede, which is not likely to happen before the 2012 elections, Politico said.