The Obama Government has said it is geared up for fiscal reforms after rating agency Standard & Poor’s threatened to downgrade the country’s AAA credit rating unless it found a way to cut the rising federal budget deficit in the next two years.

“We think the political process will outperform S&P expectations. The President is committed, as he made clear in his speech, to moving forward in a bipartisan way to reach common ground on this important issue of fiscal reform,” the White House Press Secretary, Mr Jay Carney, told reporters at his daily news conference.

The fact that he and Republicans agreed on a target of $4 trillion in deficit reduction over 10 to 12 years is an enormously positive development, according to Mr Carney.

Mr Carney said the S&P affirmed the AAA bond rating of the United States, but emphasised the importance of timely bipartisan cooperation and action on fiscal reforms.

“What the S&P analysis also said was the American economy is strong, it’s growing, it’s diversified, it’s dynamic, it continues to be the most important and most powerful economy in the world,” he argued.

On the need to reach a bipartisan approach, he said that US history showed that when the issues are important, both the sides can come together and get things done.

Any call for a bipartisan agreement on deficit reduction on fiscal reforms is a welcome one, he said, adding that there was some momentum towards it.

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