U.S. credit rating facing another cut soon

America’s credit rating is likely to take another hit before the end of 2011, threatening renewed market turmoil, Bank of America Merrill Lynch economists have warned, according to the Los Angeles Times newspaper. In a report on Friday, BofA Merrill said it sees little hope of a breakthrough by the congressional \"super committee\" on deficit reduction. The bipartisan group has until Nov. 23 to identify $1.5 trillion in deficit cuts over the next 10 years -- through reduced spending, tax hikes or both. \"The ‘not-so-super’ deficit commission is very unlikely to come up with a credible deficit-reduction plan,\" wrote Ethan Harris, North American economist at BofA Merrill. \"The committee is more divided than the overall Congress.\" Ratings firm Standard & Poor’s on Aug. 6 shocked global markets by cutting its U.S. debt rating to AA+ from AAA, marking the first time in history that the nation’s creditworthiness was considered less than top-rung. S&P at the time said that the plan Congress had just worked out to raise the federal debt ceiling fell short of what was needed to stabilize the nation\'\'s longer-term finances. The ratings firms are likely to draw the same conclusion if the super committee fails in its task, Harris warned. \"The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan,\" Harris wrote. \"Hence, we expect at least one credit downgrade in late November or early December when the super committee crashes.\"