ocrats had only been able to agree "relatively modest savings", which fell "well short" of what had been planned.

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Dallas Home Theaterwith huge debts, unemployment of 9.1%, and beset by fears of a possible double-dip recession.

S&P had threatened the downgrade if the US could not agree to cut its federal debt by at least $4tn over the next decade.
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The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened”

End Quote Standard & Poor's

Instead, the bill passed by Congress on Tuesday envisages $2.1tn in savings over 10 years.

S&P said the Republicans and Democrats had only been able to agree "relatively modest savings", which fell "well short" of what had been planned.

The agency also noted that the legislation delegates the lion's share of savings to a bipartisan committee, which must report back to Congress in November on where the axe should fall.

The bill - which also raises the federal debt limit by up to $2.4tn, from $14.3tn, over a decade - was passed on Tuesday just hours before the expiry of a deadline to raise the US borrowing limit.

S&P said in its report issued late on Friday: "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 stabilise the government's medium-term debt dynamics.

"More broadly, the downgrade reflects ou