US is stripped of its AAA credit rating for the first time

The move is a major political embarrassment coming less than a week after high-stakes wrangling among Republicans, Democrats and The White House pushed the US to the brink of default.
S&P had threatened the move in July if Washington failed to deliver what it judged to be a serious plan to tackle the country's deficit and last night, after several discussions with administration officials, the agency followed through. The US government's rating was cut to AA+ and the outlook for the debt was kept on negative in a move designed to keep pressure on Capitol Hill to go further than it has in addressing its $14trillion of debt.
"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics," S&P said.
In its statement, S&P said that it had changed its view "of the difficulties of bridging the gulf between the political parties" over a credible deficit reduction plan.
S&P said it was now "pessimistic" about the capacity of Congress and the White House to stabilise the government's debt.