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' triple-A credit rating on review for possible downgrade.
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."
In its release, Moody's explains the chance of default is low:
... But no longer to be de minimis. An actual default, regardless of duration, would fundamentally alter Moody's assessment of the timeliness of future payments, and a Aaa rating would likely no longer be appropriate.
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.'"
Update at 8:40 p.m. ET. Negotiations End On A Testy Note:
The meeting between President Obama and congressional leaders ended on a testy note, this evening. The president told lawmakers that they were confirming what many Americans already believe about their dysfunctional government. Obama then walked out of the cabinet room.
NPR's Scott Horsley reports the president said, "Enough is enough."
Other news outlets like Reuters, Associated Press, Politico and NBC News are reporting that the president and House Majority Leader Eric Cantor (R-VA) came to a head at the meeting.
Lawmakers are due back at the White House tomorrow when they'll take up the divisive issue of taxes. President Obama wants higher taxes on the wealthy beginning in 2013, to help cut the deficit. Republicans have so far refused.