(Reuters) - The United States took a step closer to losing its coveted triple-A credit rating over the weekend as a political impasse in Washington reduced hopes of an agreement to meaningfully cut the nation's budget deficit.

Although analysts still expect a last-minute deal to raise the U.S. debt ceiling and avoid a default next week, it seems unlikely that Democrats and Republicans will agree before the next election in November 2012 how to find $4 trillion through government spending cuts and revenue increases.

Prospects of a budget breakthrough faded as lawmakers missed a self-imposed deadline to produce a deal by the time Asian markets opened for the new week. They still plan to outline proposals on Monday, but both sides appear further apart than ever.

Moody's, Standard & Poor's and Fitch have said they will downgrade the U.S. credit rating if failure to raise the nation's $14.3 trillion debt ceiling leaves the Treasury without cash to service it.s debt obligations in August.