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US Could Face Second Rating Downgrade

Trader Richard Cohen, right, works on the floor of the New York Stock Exchange, September 7, 2012.
Moody's Investor Services says it may downgrade the U.S. credit rating unless Congress reaches a deal to cut U.S. debt next year.

Rival Standard & Poor's cut Washington's credit rating a year ago following hyper-partisan wrangling that pushed the United States to the brink of default on its loans.

Moody's and other agencies are watching closely as Democrats and Republicans in Congress face deadlines on $1.2 trillion in tax and spending issues.

The two sides are bickering over whether or not to continue tax cuts for the wealthy. They must also contend with a law that forces them to reach a tax and spending deal or see massive cuts to military spending favored by Republicans and drastic funding reductions for domestic programs supported by Democrats.

Some information for this report was provided by AP, AFP and Reuters.