Live

Watch CBSN Live

Moody's, S&P weigh in on "fiscal cliff" deal

WASHINGTON The nation's two largest credit rating agencies urged Congress on Wednesday to go beyond its deal and come up with a plan to shrink the budget deficit.

Moody's Investors Services said in a statement that it expects lawmakers in the coming months will take additional steps needed to lower the deficit, which has topped $1 trillion annually in each of the past four years. But if it fails to do so, the government's "Aaa" credit rating could be at risk.

}

Moody's had warned in September that it would likely cut its rating by one notch if the year-end budget negotiations failed. Moody's has a negative outlook on the government's debt, a warning of a possible downgrade.

In a separate statement, Standard & Poor's warned that the budget agreement did little to put the government's finances on a "more sustainable footing."

S&P said it would not change its rating based on the deal. In August 2011, the credit rater stunned investors by lowering its rating on long-term U.S. government debt to "AA+" and assigned a negative outlook to the rating. That followed a contentious battle to raise the government's borrowing limit.

On Wednesday, S&P offered a harsh reminder of why it stripped the U.S. of its top rating, along with a warning about the current negotiations.

"Washington's governance and policymaking had become less stable, less effective and less predictable," it said. "We believe that this characterization still holds."