WASHINGTON (dpa-AFX) - Standard & Poor said its downgrading of US rating to AA+ from AAA was not affected by the change of assumptions regarding the pace of discretionary spending growth and its ratings are determined primarily using a 3-5 year time horizon.
The agency said it used Alternative Fiscal Scenario of the nonpartisan Congressional Budget Office, which includes an assumption that government discretionary appropriations will grow at the same rate as nominal GDP. In the near term horizon to 2015, the U.S expects net general government debt to be $14.5 trillion or 79% of 2015 GDP compared to $14.7 trillion or 81% of 2015 GDP with the initial assumption.
S&P noted that it assumes discretionary appropriations grow at a lower rate and would be more consistent with CBO assessment of the savings set out by the Budget Control Act of 2011.
In taking a longer term horizon of 10 years, the U.S. net general government debt level with the current assumptions would be $20.1 trillion or 85% of 2021 GDP. With the original assumptions, the debt level was projected to be $22.1 trillion or 93% of 2021 GDP.
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