S&P warns lawmakers on debt limit downgrade: aide

WASHINGTON Thu Jul 14, 2011 9:49am EDT

WASHINGTON (Reuters) - Standard & Poor's has warned lawmakers privately that it would downgrade the country's debt if the Treasury Department is forced to prioritize payments because Congress does not raise the debt limit, a congressional aide said on Thursday.

The warning undercuts an argument made by some Republicans that the country's credit rating would not be affected as long as the Treasury Department made debt service a priority over other obligations.

(Reporting by Andy Sullivan; Editing by Vicki Allen)

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