Standard & Poor’s Ratings Services affirmed its sovereign credit ratings on the U.S., but the outlook on the long-term rating remains negative amid ongoing concerns about its fiscal health.

S&P affirmed its AA+ long-term and A-1+ short-term unsolicited sovereign credit ratings, and said its sovereign ratings on the U.S. primarily reflect its view of the strengths of the U.S. economy and monetary system, as well as the U.S. dollar’s status as the world’s key reserve currency.

It also views U.S. governmental institutions and policymaking as generally strong, although the ability to implement reforms has weakened in recent years, it notes.

“In particular, we think that recent shifts in the ideologies of the two major political parties in the U.S. could raise uncertainties about the government’s ability and willingness to sustain public finances consistently over the long term,” it says.

While the 2012 elections could resolve the U.S. fiscal debate, S&P says that it sees this outcome as unlikely. Rather, if the election is close, the race could reduce bipartisanship even further, it suggests.

Moreover, without significant fiscal policy change, S&P says it expects U.S. net general government indebtedness, as a share of the economy, to continue to increase. And, it says it believes that the U.S. will likely need a more substantial medium-term fiscal consolidation plan to arrest the deterioration in the government’s net indebtedness.

Additionally, it notes that U.S. economic and fiscal performance remains subject to a number of significant risks, including ongoing fiscal and financial market dislocations in Europe. It also puts the risk of returning to recession in the U.S. at about 20%.

The outlook on the long-term rating is negative, “reflecting our view that the likelihood that we could lower our long-term rating on the U.S. within two years is at least one-in-three”, it says. “Pressure on the rating could build if, in our view, elected officials remain unable to agree on a credible, medium-term fiscal consolidation plan… [or] if real interest rates rise and result in a projected general government (net) interest expenditure of more than 5% of general government revenue.”