The nation's AAA credit rating will likely stay put no matter what the outcome of the Deficit Supercommittee later this month, according to a report released today by the ratings agency Moody's.
On Aug. 2nd, just days before S&P's downgrade of the nation's credit rating from AAA to AA+, Moody's confirmed it's AAA rating but assigned it a negative outlook.
According the Moody's report, due to the fact that the nation's deficit will be reduced both if the Supercommittee reaches an agreement or not, Moody's does not anticipate any change in their credit rating of the U.S.
"Agreement by the Joint Select Committee and the Congress as a whole on a larger amount of deficit reduction would be favorable,” the report states, “but the smaller amount triggered by the spending caps is still a step in the same direction. Thus, the committee outcome will not necessarily lead to any change in our rating stance."
According to the Budget Control Act passed in August, if the Supercommittee does not come to an agreement on at least $1.2 trillion in deficit reduction by Nov. 23rd, an automatic "trigger" will result in almost a $1 trillion in automatic cuts to programs such as defense and entitlements.
The Moody's report will likely come as a relief to Supercommittee members, who are scheduled to hear a dire warning from former Sen. Alan Simpson and Erskine Bowles during an open congressional hearing today. According to prepared testimony, the two plan to warn the Supercommittee that "a failure by this committee might result in another downgrade."