A Moody's Investors Service report on Tuesday stated that the credit agency won't downgrade the U.S. bond rating if the deficit-reduction super committee doesn't strike a deal by its Nov. 23 deadline.
"As $1.2 trillion in further deficit reduction has already been legislated through automatic spending caps if no agreement is reached, failure by the committee to reach agreement would not by itself lead to a rating change," the Moody's report said.
Moody's said that an agreement would be seen as a "positive rating factor," particularly if the deal reins in the cost of entitlements or goes beyond the $1.2 trillion goal, and failure to reach an agreement would be seen as "more negative."
Standard & Poor's downgraded the U.S.' sovereign debt rating in August, citing concern over the growing national debt and Congress' seeming inability to address the problem. S&P's decision was prompted by political brinkmanship over finding a deal to raise the debt ceiling.
The Moody's report expressed doubt that the deficit-reduction committee would be able to find compromise. "The outcome of the joint committee's deliberations is still uncertain, and there is a significant chance that the committee will not produce an agreement to prevent triggering the automatic spending caps," Moody's said.
Moody's current rating for U.S. Treasury bonds is AAA with a negative outlook.
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