As the White House and lawmakers for renewed cooperation to tackle the deficit, was not a leading credit rating agency buying.

& Standard Poor's Ratings Service Monday warned that politics can get in the way of a budget compromise, and--in an announcement that sent stocks tumbling--said it was lowering the Outlook for the u.s. sovereign debt to "negative" from "stable" due to the risk of the growing deficit.

Washington on message, S & P warned that it may be forced to reduce the country's rating as Congress a budget deal that will bring the deficit under control cannot reach.

The announcement puts extra pressure on lawmakers and the White House if they are dueling budget plans to pitch. But the Obama administration disputed S & P of searching and said negotiators are, to the contrary, ready to bridge their differences.

"Both political parties now agree it's time to start reducing deficits as a percentage of GDP," said Mary Miller, Deputy Secretary for financial markets at the Treasury Department, in a written statement. "We believe S & P's negative outlook underestimated the ability of America's leaders to come together to the difficult fiscal challenges facing the nation."

The Agency has confirmed the investment-grade credit ratings on the United States in the long term and short term debt. S & P says that the US has a high income, diversified and flexible economy, which has helped to encourage growth and inflation.

But the country's ballooning deficit can offset these positives in the next two years. The Agency noted that the deficit in 2009 to 11 percent of gross domestic income grew. That is much higher than the average of 2 to 5 percent in the past six years.

The Declaration of S & P reflected what it's called the "significant risk" that impasse in Washington could last through the 2012 elections, leaving the Government without a medium-term deficit strategy for other years.

"Our negative Outlook on our rating on the U.S. sovereign signals that we believe there is at least one in three likely that our long term rating on the United States within two years might reduce," S & P's credit analyst Nikola g. Swann said in a statement. "The Outlook reflects our vision of the increased risk that the political negotiations on when and how do both the medium-and long-term fiscal challenges will persist until at least after national elections in 2012."

Swann said a compromise that the deficit picks up the ratings service to reverse his Outlook could lead.

"You can also the absence of such agreement or of a significant further fiscal damage for any reason whatsoever could lead us to lower the rating," Swann added.

Miller, however, said the economy is "strengthening as it appears from the recent recession." And she pointed to the reduction of the deficit plan outlined last week by President Obama in the argument that the country is ready to reverse course.

"As the President said last week, approach of the current fiscal situation is well within our capacity as a country. He has a bipartisan process that will allow to make progress on a balanced approach to restoring fiscal responsibility, "she said.

The President outlined a plan he said would reduce the deficit by $ 4 trillion over 12 years. Republicans, however, said the plan heavily relied on tax hikes and not enough to address law expenditure. Republicans are pushing their own long-term budget proposal that would overhaul Medicare and Medicaid spending, and pushing for reforms as a condition for their support to the 14.3 trillion debt limit increase.

The Federal Government is expected to hit that ceiling by next month, and the announcement of S & P quickly became a political football in that debate Monday.

Sen. Mark Kirk, R-ill., said that the debate on the debt limit offers legislators the chance "to save the dollar and our economy." He said that a "stark warning" S & P offered for the country if lawmakers "to miss out on this opportunity or if Congress sends the President a blank check."

But Rep. Peter Welch, D-VT., an argument that the notice of the need to approve the increase in the ceiling debt no matter what strengthened--because not increase the debt limit to ensure the country on the standard that may statement.

"The markets have doubts about America's ability to its fiscal house in order. And they are right, "Welch said, adding that Republicans" financial dogs of hell "if they would unleash political with the ceiling of the debt.

The Associated Press contributed to this report.

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