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Obama administration official calls S&P analysis 'way off'
The Obama administration angrily responded to Standard & Poor's decision Friday to downgrade the U.S. credit rating, with one senior official saying the agency's "analysis was way off."
U.S. Treasury officials received S&P's analysis Friday afternoon and alerted the agency to an error that inflated U.S. deficits by $2 trillion, said the administration official, who was not authorized to speak for attribution. The agency acknowledged the mistake, but said it was sticking with its decision to lower the U.S. rating from a top score of AAA to AA+.
"This is a facts-be-damned decision," the official said. "Their analysis was way off, but they wouldn't budge."
The White House is now in wait-and-see mode - hoping the decision and the S&P analysis face outside scrutiny, the official said.
"A judgment flawed by a $2 trillion error speaks for itself," a Treasury Department spokesperson said.
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 announcing the downgrade, S&P cited "political risks, rising debt burden; outlook negative."
"The downgrade reflects our opinion that the fiscal consolidation 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," the agency said.
Former Utah Gov. Jon Huntsman, who is among a field of Republican contenders for the 2012 presidential nomination, attributed the downgrade to "out-of-control spending and a lack of leadership in Washington."
"For far too long we have let reckless government spending go unchecked and the cancerous debt afflicting our nation has spread," he said in a statement. "We need new leadership in Washington committed to fiscal responsibility, a balanced budget, and job-friendly policies to get America working again."
CNN's John King and Dan Lothian contributed to this report.
FULL STORY
Unbelievable, we have screwed ourselves for a generation. Thanks to sir spend-a-lot..
Don't forget Sir Stupid-a-lot that preceded Sir Spend-a-lot.
The S&P rating means nothing because the S&P rating has, in recent history, been insane. Credit Suisse was AAA and lost investors almost 50% in a year.
Nick,
The downgrade was never even considered during the Bush years because the debt that existed was still under control and the economy was still doing fairly well. Bush may have lit the match, but Obama brought in the torch. I suppose you still blame your 3rd grade teacher for your deficiencies, though you have had years to correct them.
The debt was then under control much like the subprime mortgages, many of which were held in investment funds dubbed AAA by S&Ps.
"Political risks"
Read: "Tea Party lunatics who hold our finances hostage to promote their radical right-wing agenda."
Have you ever even spelled the word "Economics"?
Go back to art class. You're clueless.
ah-yes that radical right wing agenda of actually being fiscally responsible...those crazy right wingers.
I am pretty sure understanding and spelling economics are two different things, although the tea party may disagree with me on this one.
No it's not way off. A fool and his money are soon parted. Vote Ron Paul 2012. He TOLD you it would happen.
Fearmongering has gotten us nowhere and will get your party nowhere, just wait and see.
The republican party needs to rally around ron paul before it's too late. We need a leader in office that can begin to dismantle the our current spending policy.
I am sure all of America's senior citizens and poor people will rally behind the elimination of social security and public healthcare.
so who knows better? the S&P or the idiots in the White House and Congress that got us into this mess in the first place. Hmmmmmmmmmmmm.
wow. the first reduction in history. obama is leaving quite a legacy
IT WAS NOT HIS FAULT. It's idiots like you that are going to vote in a radical, insane nutjob into office.
I demand to know who is this "administration official".
What is this secret, unnamed government crap? Are we seriously now like 1930s Germany, the Soviet Union, and Italy?
This fake illusion of a "great powerhouse country" deserves what is coming. It's time to eat our peas.
I thought Obama "PROMISED" transparency in all of his meetings Where were the cameras during the debt talks...cut cap and balance Reid said no... How hard is it to live within your means... balance a budget and reid and pelosi may have to stop spending on freebies for all...
Obama, call me when you want to learn how to run a country!! Because OBVIOUSLY you cant.
To be fair, I haven't been putting much stock into S&P's ratings as of late. They totally dropped the ball on Greece – assigning them a high rating right up until the day they went bankrupt. Plus, S&P's actions of late seem to be heavily influenced by politics, and that is not a desirable quality imo.
So, where was S&P's strict rating policy a couple years ago when the banks were bilking investors left and right? When Lehman Brothers folded? When Merril Lynch collapsed? Now, when the US and the global economy needs all the help it can get they decide to step forward to do the wrong thing. Nice. I say we rate S&P as a FAIL.
Obama needs to resign NOW.
how about we do away with 'credit scores' all together?
Audi
Wonder why the S & P didn't down-grade us when Bush and his hawk Cheney were deregulating Wall Street and on a spending spree to democratize the Arab World?
I HAD A DREAM!!!! But?
I hope you said OUR reckless Republican cancerous debt! There was a surplus as recently as the Clinton administration!!!!!