[Updated at 9:44 p.m. ET] Referring to the Obama administration's contention that Standard & Poor's analysis of the government's finances was off by about $2 trillion, a Treasury Department spokesperson said: "A judgment flawed by a $2 trillion error speaks for itself."
The Standard & Poor's rating agency announced Friday evening that it has downgraded the U.S. credit rating to AA+ from its top rank of AAA.
On Friday afternoon, hours before S&P publicly announced the downgrade, the agency revealed its plans to the Obama administration and sent an analysis to the Treasury Department. The senior administration official said the analysis inflated U.S. deficits by $2 trillion.
Treasury analysts contacted S&P and challenged the analysis, and S&P acknowledged the mistake, the official said. But S&P said it still would stick with its decision to downgrade the United States' credit rating, according to the official.
"This is a facts-be-damned decision," the senior official said. "Their analysis was way off, but they wouldn't budge."
The official the administration can do nothing now but hope that S&P's decision and analysis faces outside scrutiny.
"These guys make Congress look good," the official said of S&P.
[Updated at 8:59 p.m. ET] Credit rating agency Standard & Poor's on Friday downgraded the credit rating of the United States, stripping the world's largest economy of its prized AAA status.
In July, S&P placed the United States' rating on "CreditWatch with negative implications" as the debt ceiling debate devolved into partisan bickering.
To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a "credible" plan to tackle the nation's long-term debt.
In its report Friday, S&P ruled that the U.S. fell short: "The downgrade reflects our opinion that the ... plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."
S&P also cited dysfunctional policymaking in Washington as a factor in the downgrade. "The effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges."
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[Initial post, 7:15 p.m.] The Standard & Poor's rating agency served the Obama administration with notice Friday afternoon that it planned to downgrade the U.S. government's AAA credit rating, an administration official told CNN.
But S&P has yet to make its ruling public, and the source told CNN the agency is reconsidering after the administration challenged S&P's analysis of the government's finances.
The source, a senior official involved in the discussions, said the agency was off by "trillions" in its economic model and was now working to revise its analysis.
S&P did not return repeated calls for comment.
The official described the talks as a "moving target" and said "it's clear some people there still want to go forward" and downgrade U.S. debt.
Rumors swirled for most of the day Friday that S&P was preparing to make its move. But even several hours after the market close, official notice had yet to materialize.
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Thanks so much Tea Party -
if you keep at it, you just might get your wish and we will all be living in the 19th century again
yeah,the tea party spent all of our money......idiot.
Tea party? Tea party? My God man! They are trying to stop the madness they did not cause. Please , put the Kool Aid down.
You can't just blame the tea party. Come on, they want spending to be cut and the deficit to be paid down. If that would happen then the credit rating agencies wouldn't downgrade our debt. I don't exactly like the tea party or their tactics, but it's not their policy that is hurting America. It is the constant spending of this administration and a President that looks weak, and brings no confidence to the economics of our society. It's the confidence that others have in our country and President Obama has hurt that with his policies and constant regulations of business for good or bad. After spending all that money on stimulus which didn't really help because the unemployment rate just got worse is the other reason for no confidence in our elected officials. Blame Bush if you want, but we elected President Obama to fix these things only to make them worse.
THANK YOU BUSH!!!
What's it feel like to swallow something hook. line, and sinker?
Bush? Really? How long are dems going to keep that up? Obama has caused %80 of this.
Bush? Obama has had two years to do something about this and he did nothing but increase spending. Bush started us down this road, Obama floored it.
Dude, Obama is President now. You should be thanking him for the wonderful job hes doing.
Please... man up... your King Obama and his libturd cronies own this one.
Actually, I have to admit... When I voted for Obama in the primaries (in California), I felt good. Then, I started thinking about what he said about the Clinton years... in essence, he said he couldn't understand why a re-distribution of wealth had not been initiated in the first couple years when Clinton had the presidency and domocrats had both sides of congress. Reflecting on that, I started worrying. The republican alternative did not look like it made any economic sense either. At that point, I started shifting my IRA's into gold. Glad I did.
S&P is being kind. Review of S&P's credit rating scales shows that a more accurate credit rating for US is BBB. The reason why it should be downgraded is because of wasting billions of dollars on badly thought out wars, and spending billions on foreign aid when it cannot properly pay its own bills at home- much of which is waste because the aid is not going to the people it is supposed to help- it is going into the bank accounts of corrupt leaders in the other countries. Other reasons for slamming US credit rating has to do with the US Government's complete failure to properly screen candidates for office such as President, for mental illness, and as a result, US is being run by a bunch of people, demonstrating by their behavior, have major personality disorders, are extremely undependable, and cannot be trusted to do the right thing or come up with feasible, properly thought out plans of action to execute much of anything-especially paying off its current debts. The US as a publicly held company is basically just another Enron right now and is only a matter of time unless some major changes happen, which right now it would seem unlikely, before US grinds slowly but surely to a halt.
wasting it on paycheck for Congress"men" with personal agendas...How much did we just pay for that debaucle?
The rating agencies is just a BS agency. The same guys gave mortgage backed sub primes loan packages a Triple A score.
No, no, no. Learn before you write.
My thoughts exactly. The S&P just rated my dog as AAA and it has a severe limp. Yawn....
Hose out Congress. I am a dyed-in-the-wool Democrat but it is time to start over. I wish I believed in the bad phases of the moon...
When you are done with the hose kid, please pass it on to me. I have a few old friends that sold us down the road. Wash em to the curb. All of them!
Thank you, House Republicans. This is really going to cut the deficit, wrong.
go back to your bar b que, BARRY SOETORO....better yet, go back to Chicago, you and Emmanuel can go back to Man's Country, just like old times, eh?
Maybe Barry will be uncovered for what he is now. Hope everyone else wakes up and see the truth for what it is.
"The source, a senior official involved in the discussions, said the agency was off by 'trillions' in its economic model and was now working to revise its analysis..."...LOL...The agency was off by 'trillions'? What is the agency run by? Tea Party radicals? LMAO....
This ship is sinking. This is John Boehner's fault.
You know, he had to save his orange ass.
republicans created this mess by not allowing obama to do anything. in the famous words of limpbaugh 'i want obama to fail, don't matter if the country wins or not'.
No one helped Obama, Reid and Pelosi destroy the economy. They did it all by themselves, beginning with the porkulus and ObamaCare.
Bud, our Dems has the palace for two years with no outside interference. We could of had it all. We blew it. Not Bush. Not the town crier. We blew it and our elected officials sold us out. Grow up.
Well without a comprehensive plan & larger cut without reducing true decreases with a more simplified tax structure lowering marginal rates with less deductions this is what we get
Thanks again to the Tea Party republicans for taking us to the brink. No taxes means no revenue. Cutiing spending alone means shrinking economy. Shrinking economy means less revenue, starting to see the picture. The whole world saw people acting like a Jonestown replay and they rewarded us.
The Treasury Department takes tax donations. How much have you, Soros, Streisand, Kennedy, Reid, Pelosi, Moore,... sent?
Please America, enough with the party loyalties, these bozos need to go. Now!
Wonder if just maybe somebody AT S&P or somebody with some INFLUENCE WITH S&P started drinking the Kool-Aid and decided "WE can be playuzz, TOO!!!" Anyone else sensing a "sudden-connectedness-where-none-was-previously-apparent" sorta thing going on here?
I'm just sayin'.