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May cut U.S. credit rating, S&P says Add to ...

Standard & Poor's has privately told U.S. lawmakers and top business groups that it might cut the U.S. credit rating if the government fails to make any of its expected payments - including Social Security checks - even if it makes all its debt payments, the Wall Street Journal reported citing people familiar with the matter.

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The U.S. Treasury Department has said if the debt ceiling is not raised by Aug. 2 it will have to start prioritizing payments.

Congress has refused to raise the statutory borrowing limit until agreement is reached on cutting the fiscal deficit which was $1.29-trillion in the last fiscal year.

Standard & Poor's had previously placed the U.S. rating on negative outlook on April 18, which meant a downgrade is likely in 12-18 months.

Earlier this week, Moody's became the first of the big three credit rating agencies to place the United States' Aaa rating on review for a possible downgrade, meaning the agency is close to cutting the country's rating.

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