The United States is prepared to take the steps needed to reduce its ballooning budget deficits and both political parties agree now is the time to act, a top Obama administration official said Monday.

"We believe S&P's negative outlook underestimates the ability of America's leaders to come together to address the difficult fiscal challenges facing the nation," said Mary Miller, Assistant Treasury Secretary for Financial Markets.

Standard & Poor's on Monday downgraded the outlook for the United States to negative, saying it believes there's a risk U.S. policymakers may not reach agreement on how to address the country's long-term fiscal pressures.