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The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday in an unprecedented reversal of fortune for the world's largest economy. S&P cut the long-term US credit rating by one notch to AA-plus on concerns about the government's budget deficits and rising debt burden. The move is likely to raise borrowing costs eventually for the US government, companies and consumers. "The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics,"...

NEW YORK (Reuters) - The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday, in a dramatic reversal of fortune for the world's largest economy. S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits. U.S. Treasuries, once undisputedly seen as the safest investment in the world, are now rated lower than bonds issued by countries such as the UK, Germany, France or Canada

Two government officials tell ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value. Official reasons given, one official says, will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited. The official was unsure if...

Treasury Secretary Tim Geithner said Tuesday there is "no risk" the U.S. will lose its top credit rating amid a new analysis that revised its outlook on American debt to "negative." Geithner took to the airwaves of financial news networks to push back against a report Monday by Standard & Poor's that lowered its outlook on U.S. debt to "negative," reflecting political uncertainty over whether lawmakers will reach an agreement to address long-term debt.

WASHINGTON, Aug. 4 (AP) - (Kyodo)—President Barack Obama has asked Treasury Secretary Timothy Geithner to stay in office despite his reported intention to step down soon, a White House official indicated Thursday. Geithner is "obviously a key member of the economic team" for Obama and "his service has been extremely valuable" to the country, White House Press Secretary Jay Carney told reporters in a daily briefing. "As Secretary Geithner has said, he hasn't decided when he will leave. And he has said he will be here for the foreseeable future," the White House spokesman said.

Of course, that is very unfair to Geithner, but there’s a kernel of truth to it. It’s not simply that the U.S. economy is in danger of falling back into recession (on cue — “we never left it”), or that the euro-zone debt situation threatens to spiral out of control. It’s that there is a lack of confidence globally that these problems can be addressed by policy makers. If there’s anything that the debt-ceiling debate demonstrated, it’s that current politics don’t allow for stimulus, whether that’s new spending the White House prefers or the tax breaks Republicans favor. Even relatively...

WASHINGTON — Timothy F. Geithner, the Treasury secretary and dean of President Obama’s economic team, is expected to stay through the president’s term after intense White House pressure, according to officials familiar with the discussions. But Mr. Geithner has not yet notified the White House of his intentions, and family considerations could still win out, advisers say. Speculation from Washington to Wall Street has intensified because Mr. Geithner, the only holdover at the center of Mr. Obama’s original economic circle, said a month ago that he would decide on his future after the White House and Congress reached a deal...

THE devastation wrought by the great recession is still all too real for millions of Americans who lost their jobs, businesses and homes. The scars of the crisis are fresh, and every new economic report brings another wave of anxiety. That uncertainty is understandable, but a review of recent data on the American economy shows that we are on a path back to growth. The recession that began in late 2007 was extraordinarily severe, but the actions we took at its height to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on...

Senate Majority Leader Harry Reid is pictured as he speaks to the press following more U.S. debt reduction talks on Capitol Hill, July 26, 2011 Senate Majority Leader Harry Reid (D-NV) talks to U.S. Treasury Secretary Timothy Geithner (R) after their meeting about the debt limit on Capitol Hill in Washington July 14, 2011 Senate Majority Leader Harry Reid Whispers to Speaker of the House John Boehner

U.S. Treasury Secretary Timothy Geithner told Senate Majority Leader Harry Reid (D., Nev.) Friday that Congress must quickly to raise the debt ceiling to ease market uncertainty. During a morning phone conversation, Geithner "underscored the need for congressional action to avoid creating more uncertainty for the economy and financial markets," a Treasury spokesperson said. Reid disclosed what he called a "very sobering conversation" earlier Friday. Based on the call, Reid said businesses were having trouble borrowing outside of short-term lending "They can't borrow more money than overnight because no one knows what the interest rate will be tomorrow," said Reid.

...One other factor that could lift bond prices is that Treasury could be forced to stop selling new bonds, which would limit the supply available for investors. Limiting supply typically helps to lift prices. Thursday's auction of 7-year Treasuries came in with a yield of 2.25%, the lowest rate Treasury has had to pay for notes of that term since last November.

The U.S. Treasury Department said it will meet with primary-market dealers in New York on Friday as part of regularly scheduled meetings ahead of next week's quarterly refunding announcement. Treasury is due to announce next week its borrowing needs for the current quarter and its plans for selling debt to meet those needs. But the political debate over whether to raise the $14.3 trillion debt ceiling has thrown into question how Treasury can sell more debt. The meeting on Friday will include all 20 primary dealers. Normally Treasury meets half of the key Wall Street dealers in individual sessions ahead...

A congressional panel is examining whether the Obama administration tried to unduly influence Standard & Poor's before the credit rater revised its outlook on the debt rating to negative. Randy Neugebauer, the Republican chairman of a House oversight panel, said on Wednesday his staff is probing whether Treasury tried to make material changes to a draft of S&P's news release announcing the negative outlook revision in April. "Our concern was if the administration was trying to influence this rating decision some -- above what would be a normal practice," Neugebauer told reporters after a hearing examining oversight of the credit...

Fate of Boehner, Reid Debt Limit Plans UnclearBoehner rewriting plan; Reid plan saves $2.2 trillion says CBO Washington, DCWednesday, July 27, 2011 Debate and a vote on House Speaker John Boehner's (R-OH) debt reduction legislation was postponed at least one day as the Speaker rewrites his bill.  The Congressional Budget Office (CBO) released an analysis of his plan. It says it cuts $850 billion over ten years, less than the $1.2 trillion Boehner claimed it would save.  Additionally, Senate Majority Leader Harry Reid (D-NV) also postponed debate of his debt ceiling proposal until at least Thursday. Media reports say he is...

<p>Treasury Secretary Tim Geithner said Sunday that he did not initially think lawmakers would bring the debt-ceiling negotiations "this close to the edge," appearing taken aback by the lingering distance between the two sides with an Aug. 2 deadline looming.</p>

Despite persistent questioning from Chris Wallace, Treasury Secretary Timothy Geithner refused to acknowledge what his plans were just in case the debt ceiling is not raised before August 2nd. Insisting that his plan was only to get Congress to raise the debt ceiling, Geithner seemed to demonstrate just how fearful he is of what might happen by hesitating to even discuss the possibility of any contingency plan. Continuing to sound the alarm, Geithner warned Wallace, “we do not have the ability, Chris, to protect the American people from the consequences of Congress not” raising the debt ceiling. And he reiterated...

Geithner’s excuse, math is hard. HuffPo — For months, markets have been girding themselves against the possibility that the U.S. will reach the limits of its borrowing ability on August 2 and default on its debts. But researchers at Barclays Capital think the real deadline may not be until a week later. In a note published Friday, the Barclays Interest Rates Research team wrote that “the date on which the Treasury will run out of cash to pay its obligations might not be August 2; it might be around August 10 instead.” Why the change? The note explains that previous...

As Ludwig Von Mises once famously postulated ...."Paper is the only commodity that government can render worthless merely by applying ink". In our current economic environment, our merry band of incompetents, Obama, Benranake, and Geithner are intent of proving Von Mises correct. In his testimony before Congress last week, Bernanke got into an argument with Ron Paul about his overuse of the gov't printing presses. Bernanke actually told Paul that 'gold is an asset, it is not money". This kind of hubris by the man charged with running the Federal Reserve has been noticed by the rest of the world,...

If Congress and the president don't raise the debt ceiling, the consequences will be disastrous, politicians and pundits tell us, -- the equivalent of an economic Armageddon. And President Obama warns that the consequences are so dire that he cannot possibly tolerate any delay in making an agreement. He announced yesterday that any debt deal must be completed by today, July 15th. According to Treasury Secretary Timothy F. Geithner, failure to raise the debt ceiling limit will cause the United States to default and "cause a financial crisis potentially more severe than the crisis from which we are only now...

Barack Obama is today preparing to re-enter talks with Republicans as the two sides battle to reach an agreement in the ongoing debt ceiling crisis. Fuming lawmakers pointed fingers at one another and Obama on Thursday as negotiations over raising the national debt limit entered a perilous endgame. Federal Reserve Chairman Ben Bernanke warned of economic damage, and an anxious Wall Street envisioned catastrophe if the U.S. defaulted on its obligations. In the build up to today's meeting, Moody's ratings agency yesterday said that the U.S. could lose its top credit rating in coming weeks if a stand-off between the...