Federal Deficit, Debt Limit | featured news

Standard and Poor's does not think the United States will default on its debt, the rating agency's president Deven Sharma said on Wednesday.

Americans already concerned about their jobs Wednesday begged Washington politicians to stop dithering, cut the budget and resolve a debt crisis they fear could lead to higher interest rates, or worse.

Could the U.S. lose its top credit rating even if a deal is reached to raise the debt limit? Market analysts and investors increasingly say yes. The outcome won't be quite as scary as a default, but financial markets would still take a blow. Mortgage rates could rise. States and cities, already strapped, could find it more difficult to borrow. Stocks could lose their gains for the year.

Rival Democratic and Republican plans to raise the government's borrowing ability have thrust Congress into a standoff just one week away from a potentially devastating debt crisis.

House of Representatives Speaker John Boehner broke off talks with President Barack Obama on Friday and said he will begin negotiations with Senate leaders aimed at meeting an August 2 deadline to avert an unprecedented U.S. debt default.

The Senate on Friday voted along party lines against the proposal to cut spending and raise the debt limit. President Obama pressed for compromise during a town hall meeting.

The government will lose about $200 million a week in airline ticket taxes if the Federal Aviation Administration is forced to shut down.

Standard & Poor's reiterated on Thursday it sees a real risk that future U.S. government deficits may meaningfully miss discussed targets and that there is a 50-50 chance the U.S. AAA credit rating could be cut within three months, perhaps as soon as August.

President Barack Obama offered strong praise Tuesday for a deficit reduction plan put together by a bipartisan group of senators, calling the measure's mix of tax hikes and spending reforms "broadly consistent" with his own approach to the current debt ceiling crisis.

Top Republican lawmakers and the Obama administration’s budget director both predicted Sunday that an agreement would be reached before the federal government defaults on its debt in early August, but both sides continued to squabble over the details of competing proposals, offering little evidence that a deal was at hand.