Obama administration official calls S&P analysis 'way off'
August 5th, 2011
09:34 PM ET

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
Post by:
Filed under: Economy • Finance • U.S.
soundoff (197 Responses)
  1. Bill

    Huntsman is right when he said the downgrade is due to "out-of-control spending and a lack of leadership in Washington", but that lack of leadership is within his own party. If Boehner, McConnell, and Cantor hadn't felt the need to bend over to the demands of a fringe minority with no real knowledge of economic or political reality, he would gotten a deal similar to the $ 4 trillion in cuts Obama proposed. But God forbid a Republican actually ever admits Obama had put out a good proposal, so if the three stooges hadn't felt the need to turn this into a political sideshow, they would have gotten $ 4 trillion in cuts instead of $ 2.4t, the debt ceiling raised in a more reasonable timeframe, and we'd still have our credit rating in tact. Way to go, morons.

    August 5, 2011 at 9:46 pm | Report abuse |
    • BD

      no way, the credit rating was going anyway and everyone knew it. Even the 4T reduction was spaced too far out. S&P wanted a medium term reduction. Sadly, Obama is only a slightly worse joke than the spineless GOP.

      August 5, 2011 at 9:50 pm | Report abuse |
    • Chris Wiegard

      agreed. the 4 trillion deal would probably have satisfied S&P. The 2 trillion deal, nope. The Eric Cantor/Tea Party position that we have to excuse the rich from helping to pay off the national debt offers no realistic avenue to getting it done.

      August 5, 2011 at 9:55 pm | Report abuse |
    • Snookie

      Where was Huntsman during the negotiations? Now he comes out with sound bites for his campaign but did nothing when the negotiations were going on.

      August 5, 2011 at 11:24 pm | Report abuse |
  2. Giant Panda

    What, me worry?

    August 5, 2011 at 9:47 pm | Report abuse |
  3. jimbo

    You can blame congress, i to believe there weak, blame the tea party though i think people give them more power than they actually have, it still starts at the top , thats why Obama will be a one term president..

    August 5, 2011 at 9:47 pm | Report abuse |
  4. Mr Jaz

    If we would have just gone with the 4 trillion and revenue increases Obama suggested we wouldn't be in this position now. The Credit Rating went down because our politicians are a bunch of irresponsible jacks.

    I would like an apology.

    August 5, 2011 at 9:47 pm | Report abuse |
  5. BD

    BS it was flawed. They are probably based in reality; not the strummed up numbers the govt and CBO come up with depicting MORE than favorable conditions in which they base their false reality. Our debt increases faster every month than the 2.1 Trillion smoke and mirrors reduction over TEN years back loaded.

    August 5, 2011 at 9:48 pm | Report abuse |
  6. kc_and_fa

    With nobody willing to denign our unborn grandchildren are expected to payoff today's operating budget overruns, I can't really fault the downgrade. Where is that magic bullet that will make America great again?

    August 5, 2011 at 9:48 pm | Report abuse |
  7. steveNYC

    The White House publicly protests. But this is GREAT news for the Obama Administration (they never waste a good "crisis"! I see another phony stimulus package coming.

    August 5, 2011 at 9:48 pm | Report abuse |
    • BD

      Right, they had to object to try and save the markets and well lying again.

      August 5, 2011 at 9:52 pm | Report abuse |
    • Chris Wiegard

      don't be silly, there will be no more stimulus packages. Not with the Tea party running the House of Representatives.

      August 5, 2011 at 9:52 pm | Report abuse |
  8. Bull

    Liberal spending. All those who wanted change and got Heir Obama elected have their change now. And its worth nothing!

    August 5, 2011 at 9:49 pm | Report abuse |
    • Louis

      Quoting Brian
      "Liberals are blaming the Tea Party, really? I guess their drive to cut spending is the cause for S&P saying the debt deal didn't go far enough? So clueless. Its not the fact that the US Government spends $2,000,000,000,000.00 more per year than our economy takes in, its a group from congress who wants to cut spending. Ya, its gotta be that and not the "free Obama Money" he's been printing and spending since he was elected. Wow, so clueless."

      And to offset this with along with spending cuts was to tax the top 1% of Americans. You have a problem with this why? What is wrong with taxing these "job creators". Can we please stop the ignorance in America please?

      August 5, 2011 at 9:56 pm | Report abuse |
    • George

      Wasting time on who's fault it is is similar to making beds in a burning building, sure you might have a nice clean room, but the whole building is going down. We need problem solvers, and I as a permanent resident think it's time for an over all change in leadership.

      Brinkmanship aside, both parties and the president have not executed thier duties as civil servants. They have not created a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and/or secure the Blessings of Liberty to ourselves and our Posterity.

      It is in these ways that America has become great, and now it is at a turning point. Do waste time pointing fingers, or do we survive?
      -george

      August 5, 2011 at 10:00 pm | Report abuse |
  9. Unemployed MBA Graduate

    RIP USA 1492-2011.

    August 5, 2011 at 9:50 pm | Report abuse |
  10. Brock

    I bet it is Washington who is off by the 2 trillion. I trust S&P a lot more with the figures than Washington.

    August 5, 2011 at 9:50 pm | Report abuse |
  11. fred

    Mr. Jaz, Obama never had a plan. He never laid out 4 trillion in cuts. Learn your facts.

    August 5, 2011 at 9:50 pm | Report abuse |
  12. Guest

    It is obvious this is how disillusioned the United States government is to their own doings. The credit downgrade was WELL deserved and regardless if the rating agency made that mistake, the government is completely dysfunctional and is not willing to make the tough decisions needed.

    August 5, 2011 at 9:50 pm | Report abuse |
  13. Time for an investigation

    This company needs to be investigated for their involvement with the derivative and credit default swaps along with Moody's. They gave AAA rating to those because they were making money off it. Strange that they didn't do this when the debt was being created by Bush! show more show less

    August 5, 2011 at 9:51 pm | Report abuse |
  14. Brian

    We Are Done we are about as credit worthy as Mexico Welcome to the Next 3rd World Country

    UNITED STATES OF AMERICA

    THANKS OBAMA AND CONGRESS WERE SCREWED!!

    August 5, 2011 at 9:51 pm | Report abuse |
  15. ahleucha

    THIS is how our government reacts? They're behaving in a "consequences be damned" parallel universe, and are actively doing everything they can to turn the United States into freakin' Sudan! MAYBE if they quit b******* at each other and ATTEMPTED to find solutions, this wouldn't have happened. This is the first of many downgrades.

    August 5, 2011 at 9:52 pm | Report abuse |
1 2 3 4 5 6 7 8