Moody's puts U.S. credit rating on review for possible downgrade

As the clock ticks down to the Aug. 2 deadline to raise the debt ceiling, Moody's Investor Service became the first of the big-three rating agencies to put the United States' Aaa credit rating on review for possible downgrade.

Reuters reports:

In a statement, Moody's said it sees a "rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on U.S. Treasury debt obligations."

As the Washington Post reports, congressional leaders and the president had their fourth meeting in as many days today, but are still not closer to a compromise. Our friend Frank James at It's All Politics, wrote about a plan proposed by Senate Minority Leader Mitch McConnell (R-KY) that would hand President Obama the power to raise the debt ceiling all by himself. But, today, House Majority Leader Eric Cantor (R-VA) rejected McConell's proposal.

The Federal Reserve Chairman, Ben Bernanke, told the House Financial Services Committee that Congress needs to raise the debt ceiling. The New York Times reports he said "failure to do so would cause 'huge financial calamity.' And he compared the arguments against an increase to 'having a spending spree on your credit card and then refusing to pay the bill.'"

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