Fitch: U.S. must fix fiscal cliff to keep AAA
FRANKFURT (MarketWatch) — President Barack Obama won’t enjoy a fiscal honeymoon after winning re-election, with pressure on U.S. officials to resolve the so-called fiscal cliff and other issues in order to maintain the country’s AAA credit rating, Fitch Ratings said Wednesday. “The economic policy challenge facing the president is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the [United States]. Resolution of these fiscal policy choices would likely result in the U.S. retaining its AAA status from Fitch,” the firm said. Failure to avoid the fiscal cliff — a combination of tax hikes and spending cuts that will come into effect on Jan. 1 unless politicians reach a budget deal — and raise the country’s debt ceiling in a timely manner would likely result in a downgrade in 2013, said Fitch, which has a negative outlook on the U.S. credit rating. Rival firm Standard & Poor’s last year stripped the U.S. of its AAA rating on debt worries.