S&P defends U.S. downgrade; Moody's says U.S. still AAA
By Walter Brandimarte
NEW YORK (Reuters) - Ratings agency Standard & Poor's, still under fire for downgrading the United States late last week, on Monday again restated the reasons for its decision while rival Moody's set itself apart, saying America still has the characteristics of a AAA-rated country.
Still, a top Moody's analyst reiterated that the United States is running out of time to reduce its debt burden before Moody's, too, would downgrade the country's debt.
Top S&P officials made the rounds in TV shows and a phone conference with clients to explain the move, which fueled a ninth day of losses in global equities and drew strong criticism from President Barack Obama's administration.
"Our task is to explain to users of our ratings where we come from and, ultimately, our research is out there for investors to look at and decide whether they agree with us or not."
Moody's Investors Service, which on August 2 confirmed the U.S. Aaa rating with a negative outlook, explained it did so because it is not "necessarily impossible" that U.S. lawmakers come up with additional deficit-reduction measures next year.
Failure to do so by the end of 2013 would probably lead to a downgrade of U.S. ratings, Steven Hess, Moody's top analyst for the United States, told Reuters in an interview.
A downgrade could also happen before that if the current plan to reduce the budget deficit turns out not to be "credible," he said.
(Additional reporting by Daniel Bases and Burton Frierson; Editing by Andrea Ricci)