Standard & Poor's confirmed the U.S. credit rating at AA+ on Wednesday, saying debt levels remained high and policy-making weak, four years after it cut the country's top-level triple-A rating. S&P recognized the return to strength of the U.S. economy and efforts to bring down debt levels that shot up in the 2008 financial crisis. But it said net general government debt remains at a high 80 percent of GDP, a level that will hold through 2018 but then begin to rise again. And it cited a looming new political battle over the country's debt ceiling as creating uncertainty for economic pollicy.
Political gridlock over raising the debt ceiling -- necessary to fund government -- was the issue that forced the August 5, 2011 downgrade which lost Washington its AAA rating for the first time in history. The same issue led to a short shutdown of the government in October 2013 that raised further questions about the economy and governance. S&P cited both as reasons for not restoring a top rating to the U.S. on Wednesday.
"A high level of general government debt as well as a lack of political cohesion among the main parties in Congress -- resulting in comparatively short-term-oriented policymaking -- constrain the ratings," S&P said.
"The AA+ rating already factors in our view that U.S. elected officials are less able to react swiftly and effectively to public finance pressures than are officials of some more highly rated sovereigns.
"It includes the prospect that debates over raising the debt ceiling could be protracted and difficult."
While the agency said it expects, as before, that the ceiling gets raised so the government can fund its chronic budget gap, "it has been our long-held view that debate poses a risk to the economy."
S&P added that the rating could be raised back to AAA "if we see evidence of successful bipartisan efforts around fiscal policy decisions, or a pronounced decline in the general government debt burden."