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Debt ceiling: Fitch puts US credit rating under review Debt ceiling: Fitch puts US credit rating under review
(35 minutes later)
Ratings agency Fitch has put the US AAA credit rating under review for a downgrade as the deadline to raise the US borrowing limit draws closer.Ratings agency Fitch has put the US AAA credit rating under review for a downgrade as the deadline to raise the US borrowing limit draws closer.
The move comes after Democrats rejected a plan by the Republican-led House of Representatives as an attempt to appease a small group of conservatives.The move comes after Democrats rejected a plan by the Republican-led House of Representatives as an attempt to appease a small group of conservatives.
House of Representatives Republicans said they were planning to vote on a revised plan on Tuesday night. House Republicans later revised their plan and said they would put it to a vote, but even that is now in doubt.
The US must raise its $16.7tn (£10.5tn) debt limit by Thursday or risk default.The US must raise its $16.7tn (£10.5tn) debt limit by Thursday or risk default.
"The [Fitch] announcement reflects the urgency with which Congress should act to remove the threat of default hanging over the economy," a US Treasury spokesperson said."The [Fitch] announcement reflects the urgency with which Congress should act to remove the threat of default hanging over the economy," a US Treasury spokesperson said.
'We have lost''We have lost'
While Fitch said it expected the debt limit to be raised soon, it added that "political brinkmanship" and "reduced financing flexibility could increase the risk of a US default".While Fitch said it expected the debt limit to be raised soon, it added that "political brinkmanship" and "reduced financing flexibility could increase the risk of a US default".
During a previous fiscal standoff on Capitol Hill in 2011, another credit rating agency, Standard & Poor's, downgraded the US rating from AAA to AA+.During a previous fiscal standoff on Capitol Hill in 2011, another credit rating agency, Standard & Poor's, downgraded the US rating from AAA to AA+.
The latest budget battle began 15 days ago when conservative House Republicans brought about a partial government shutdown by demanding that President Barack Obama defund or delay his signature healthcare overhaul.The latest budget battle began 15 days ago when conservative House Republicans brought about a partial government shutdown by demanding that President Barack Obama defund or delay his signature healthcare overhaul.
The party subsequently dropped that position and by Tuesday morning House Republicans were seeking only minor changes to the 2010 Affordable Care Act. The party subsequently dropped that idea and by Tuesday morning House Republicans were seeking relatively minor changes to the 2010 Affordable Care Act.
But following swift condemnation from the White House and Democrats, they amended their plan later in the day by ditching even those proposals. But following swift condemnation from the White House and Democrats, they amended their plan later in the day to strip it of even those proposals.
Gone from the latest Republican proposal was a measure to delay a medical device tax created under the law, commonly known as Obamacare. Gone from the latest Republican proposal were two provisions that would have delayed two taxes that help fund the law commonly known as Obamacare.
Also removed was a plan to impose tougher income verification standards on individuals and families seeking subsidies for medical care under the law.
The new House plan would reopen the government until 15 December and raise the debt ceiling through to 7 February.The new House plan would reopen the government until 15 December and raise the debt ceiling through to 7 February.
The House of Representatives said it was planning to hold a vote on Tuesday on its proposal.The House of Representatives said it was planning to hold a vote on Tuesday on its proposal.
But it is not clear if it has enough votes to pass in the lower chamber. And differences with an emerging Senate plan could complicate prospects for final passage before 17 October, when the US Treasury says the government will run out of money to pay its bills. But a rules committee postponed a hearing that would allow the bill to reach the floor of the chamber.
Republican Senator John McCain, who was the party's 2008 presidential nominee, told the New York Times: "Republicans have to understand we have lost this battle. It is not clear if the plan has enough votes to pass in the lower chamber.
Among those resisting was Republican Representative Joe Barton, who told the Associated Press on Tuesday any plan to end the crisis must have deep spending cuts to win his vote.
"No deal is better than a bad deal," Mr Barton said.
And differences with an emerging Senate plan could complicate prospects for final passage before 17 October, when the US Treasury says the government will run out of money to pay its bills.
Republican Senator John McCain, who was the party's 2008 presidential nominee, was quoted by the New York Times as saying: "Republicans have to understand we have lost this battle.
"As I predicted weeks ago, that we would not be able to win because we were demanding something that was not achievable.""As I predicted weeks ago, that we would not be able to win because we were demanding something that was not achievable."
The White House has refused to negotiate over the health law, pointing out that it passed in 2010, was subsequently validated by the Supreme Court, and was a central issue in the 2012 presidential election, which Mr Obama won handily.The White House has refused to negotiate over the health law, pointing out that it passed in 2010, was subsequently validated by the Supreme Court, and was a central issue in the 2012 presidential election, which Mr Obama won handily.
Political analysts have suggested the fallout from the affair could damage Republican prospects in next year's midterm elections.
A Washington Post/ABC News survey on Monday found 74% of voters were unhappy with congressional Republicans' handling of the standoff, compared with a 53% disapproval rating for President Obama.
The US Treasury has been using what are known as "extraordinary measures" to pay its bills since the nation reached its current debt limit in May. Those methods will be exhausted by 17 October, it has said.
Meanwhile, the government remains partially shut down because Congress failed to agree on funding by a 1 October deadline.
The impasse has closed a swathe of federal services and left hundreds of thousands of employees out of work.