Budget Deficit

Moody's Threatens to Downgrade America's Credit Rating

Reduce deficit or else

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Moody's has threatened to downgrade America's prized triple A credit rating if Congress fails to reach a deficit reduction deal, raising the stakes in the fiscal debate that lies at the heart of the November election.

The ratings agency said on Tuesday it is considering joining its rival Standard & Poor's – which stripped the US of its top rating last year – if a deal is not reached by the end of the year. The threat is likely to feed into election campaign concerns over the state of the economy and lift Republican hopes of a boost for Barack Obama's challenger, Mitt Romney, by focusing attention on the size of the national debt.