WASHINGTON - April 19, 2011 - Ratings agency Standard & Poor's has cut the outlook on U.S. sovereign debt to "negative", raising doubts about Washington's ability to tackle its huge debt and fiscal deficits.

The move, the first time S&P has ever placed such a warning on the U.S.'s gold-standard AAA rating, raised the stakes as Washington's political leaders began grappling over how to address the government's yawning budget shortfall over the long term.

Regime officials said S&P "underestimates" political leaders' ability to agree on a path out of the country's worst financial jam since the 1930s.

But S&P said it could not foresee any deal between Democrats and Republicans until after the November 2012 presidential and congressional elections, and that without one, the problem was only going to worsen.

"Because... the path to addressing these (problems) is not clear to us, we have revised our outlook on the long-term rating to negative from stable," S&P said.