Standard & Poor’s put a “negative” outlook on the United States’ AAA credit rating, citing rising budget deficits and debt, Bloomberg reported.

“We believe there is a material risk that U.S. policy-makers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013,” Standard & Poor’s said today. “If an agreement is not reached and meaningful implementation does not begin by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA’ sovereigns.”

Under President Barack Obama’s fiscal year 2012 budget, the total debt subject to the ceiling would be $20.8 trillion in 2016. The plan House Republicans approved April 15 would need a debt ceiling of at least $19.5 trillion, according to data compiled by Bloomberg Government.

The U.S. Treasury Department projected that the government may reach the current $14.3 trillion debt ceiling limit as soon as mid-May and run out of options for avoiding default by early July.

Last week, Moody’s Investors Service said Obama’s plan to cut $4 trillion in cumulative deficits within 12 years may be a “positive” for the nation’s credit quality and mark a reversal in the budget debate.