Us warned on lack of deficit plan

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18 April 2011 last updated at 16: 42 GMT Republicans push on plans massive cut government expenditure of US warned has been that the its national debt by standard & poor's credit rating could be cut.

S & P is concerned, that Democrats and Republicans no plan to reduce the growing US deficit agree with can.

It has its Outlook from stable to negative, increasing the probability that the rate could be cut within the next two years downgraded.

The US Treasury replied that S & P had underestimated its ability to deal with the public debt.

"Since the United States have, relative to the 'AAA' [top rated] people like what we think huge budget deficits and rising debt of the Government and the path to the addressing this is clear not us, we have our Outlook on the long-term rating revised, stable to negative" the Agency said in a statement.

The surprise move sent to reduce us and European shares. The S & P 500 fell the most in a month, and US dollar fell against the euro and Swiss franc. Oil was also significantly lower.

In Europe the UK, German and French fell main indexes all at least 2%.

The US deficit fédéral currently amounts to $1. 4tn (£ 858bn) and is expected to reach $1. 5tn in the current financial year.

Budget battle

President Barack Obama proposed that could plunge the world into a new recession, when the ceiling for money that can hire the United States is not raised in the next few weeks, before the current debt of $14. 3tn.

Read the main story of Mr Obama continues and the Republicans in a battle over the extent of expenditure locked cuts are.

The House of representatives Republicans controlled budget, which aims, 2012 has a $6. 2tn expenditure by the Government over the next decade cut passed.

But the Bill is expected not to make the Democratic-led Senate.

The current battle is now about issues by 1 October. Last week Congress passed a budget bill, the $38 billion in public spending on the rest of the current financial year until would cut to 30 September.

Last week, Mr Obama laid out his plan to reduce the budget deficit to $4tn 12 years.

'Political judgment'

Austan Goolsbee, Chief Economist of the President of economic recovery Advisory Board, U.S. dismissed the change in Outlook in the production of the rounds on cable networks.

Ajay Rajadhyaksha, head of fixed income at Barclays Capital in New York reviewed the U.S. deficit dilemma

"What does the S & P is a political decision, and it is one, we do not agree with", he told CNBC.

The S & P Outlook cut comes after the International Monetary Fund (IMF) last week before warned that the size of instability of financial markets created the U.S. deficit.

In a statement, S & P was positive about the General State of the US economy, but said: "we believe that it material risk that no agreement on the response of medium- and long-term fiscal challenges could reach U.S. policy makers by 2013."

"If an is not agreement and meaningful implementation is not started until then would this we believe that the U.S. tax profile useful weaker than the peer"AAA"sovereigns play."

'Wake-up call'

The United States have the top AAA rating for the long-term bonds.

Because the United States are the world's largest economy and its debt is the backbone of the global financial system, concern about the U.S. created ability, his debt to pay huge waves in the world economy.

"It is a wake-up call that we need to do something," says Axel Merk, currency Fund Manager in California. S & P is "must be absolutely right that this treated that something serious."

But the US Treasury responds strongly to the change in Outlook.

"We believe that S & P's negative Outlook the ability of America's leaders, together, to the difficult fiscal challenges of the nation underestimated address," he said.