(MENAFN) Ratings agency Moody's said it may revise US' AAA credit rating if Congress fails to conclude a budget that will cut the federal debt burden, AFP reported.
Moody's said in case the Congress comes out with specific policies that lead to stabilization and then lower the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable.
Moody's also said it was unlikely that it would keep the Aaa rating with a negative outlook into 2014.
The ratings firm said the only scenario that would achieve debt stabilization is through a large, immediate fiscal shock, such as would occur if the so called 'fiscal cliff' actually materialized, which could lead to instability.
The fiscal cliff is a mandated mixture of spending cuts and tax hikes, and is expected to occur at the beginning of 2013, unless divided lawmakers can find a way to avoid it.
Moody's added that if the fiscal cliff happened, it would need evidence that the economy could rebound from the shock before it would consider returning to a stable outlook.
It also warned that it would place the US debt rating under review after the debt limit is reached but several weeks before the Treasury's resources are exhausted, noting that it took a similar action during the summer of 2011's debt ceiling battle.
A year ago the United States, for the first time in its history, lost its triple-A rating as another ratings firm downgraded the nation after lawmakers remained in an impasse over fixing the fiscal deficit.
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