Moody's expects the United States will avoid a shutdown and increase the debt limit, the rating agency said in a report. But failure to lift the cap on what the government can borrow could "theoretically affect all categories of government spending, including debt service." Nevertheless, a debt ceiling impasse and a government shutdown are unlikely to affect the US sovereign rating, a Moody's analyst told Reuters, because the agency is focused on the long-term debt outlook. "At this time we don't see that (rating cut) as a consequence of these short-term events," said Steven Hess, Moody's lead US sovereign credit analyst. "The rating is based more on the long-term outlook for the debt, rather than what we think will be short-term events," Hess added.