New York, Aug. 8 (Xinhua) -- Standard & Poor's (S&P) downgraded on Friday the credit rating of the United States from its top-notch AAA rating to AA-plus, just days after the U.S. government narrowly escaped an unprecedented debt default.

S&P cut the long-term U.S. credit rating on concerns about growing budget deficits, saying the freshly passed debt reduction plan by U.S. Congress does not do enough to stabilize the nation's debt situation.

"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement.

U.S. President Barack Obama signed on Aug. 2 legislation to reduce the fiscal deficit by 2.1 trillion U.S. dollars over the next 10 years after months of wrestling with Congress over spending cuts and raising taxes to slash the government's debt burden and increase its borrowing limit.

The failure to effectively deal with the political gridlock and address a slowing down economy has led to worst weekly losses in the U.S. stock markets in two years.

S&P placed U.S. government bonds on review last month and warned there was a 50 percent chance it would downgrade the U.S. credit rating in the following three months unless the U.S. government and Congress reached a reliable agreement to reduce federal debt.

U.S. Treasuries bonds used to be considered the safest investment worldwide. The downgrade is expected to further spook global investors as they are already struggling to deal with financial turmoil in recent weeks amid an escalating euro zone debt crisis and sputtering world economic recovery.