Moody's: U.S. Aaa Rating Not Under Pressure in 2010 or 2011

The U.S. Aaa credit rating won't be under pressure from budget deficits in 2010 or 2011, Moody's Investors Service (MOD) said.

The White House budget office projects that the federal deficit will top $1.5 trillion this year.

"Certainly over time, and I'm not talking about this year or next, but over the medium term and the long term the debt trajectory such as it's laid out in official projections at this time, could put pressure on the Aaa rating eventually," Steven Hess, senior credit officer with Moody's, told Bloomberg News.

Hess said that implementing a proposal from President Barack Obama's deficit-reduction committee would help safeguard the Aaa credit rating, which signals "minimal credit risk."

Democrats and Republicans have both expressed doubts about the proposal.

Moody's has said that extending the tax cuts enacted under President George W. Bush would have a negative implication for the debt rating. Still, Hess said that a permanent extension would not lead to a downgrade.




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