“The US economy’s resilience should support solid fiscal revenue collection, including from continued tariffs, and stabilize fiscal deficits over the next several years,” analysts at S&P led by Lisa Schineller said in a statement. 

The analysts said the outlook is stable, backed up by solid economic growth, “credible, effective monetary policy execution,” and fiscal deficits that are high but not rising.

S&P expects US net general debt to approach 100% of GDP “given structurally rising nondiscretionary interest and aging-related expenditure.” The analysts also noted that the US’s political parties are far apart and bipartisan cooperation to lower deficits and deal with shrink the budget, “remains elusive.”

On the other hand, they said the parties will continue to resolve the recurring issue of the US’s debt ceiling, which has been regularly lifted by Congress in recent years, and continue to authorize more borrowing because the consequences of not doing so will be severe on financial markets and the economy.

S&P said that a risk remains the US’s credit rating could slip over the next two years if deficits increase because lawmakers can’t contain spending or “manage revenue implications from changes in the tax code.”

All three major ratings agencies have the US pegged one level below Triple-A with stable outlooks, but S&P said its assessment of the US is below some of its peers. The dimmer view takes into account political polarization “with comparatively sharper swings in policies, particularly under a unified government,” S&P said. “It also reflects the lesser ability of the US political class to redress deterioration of the sovereign’s fiscal profile.”

S&P Global Ratings was the first major credit grader to strip the US of its AAA rating in 2011 and was harshly criticized by the US Treasury at the time.