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.

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Filed under: Economy • Finance • U.S.
soundoff (197 Responses)
  1. Rajiev

    Blaming everyone except themselves.Now the Administration is blaming S&P.

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

      They're running out of people to blame

      August 5, 2011 at 9:53 pm | Report abuse |
    • Ken

      Figures, point the finger game. Way to go Washington. Im just hoping that "We The People" will put forth "Revolt" votes this up and coming go around. Sad thing is there will be more complaining then actual votes that will be needed to turn this circus around

      August 5, 2011 at 10:01 pm | Report abuse |
    • NJ08052

      That is what Democrats do best... BLAME OTHERS... point the finger ...but had the senate passed cut cap and balance...S&P would have had their 4 trillion in cuts... Lets open the playbook...Blame Bush...no cant use that one again...especially since people are starting to realize Reid and Pelosi ran Congress under Bush... Be thankful for the healthcare we rammed down your throats when controlled the entire govt...and now blame the tea party for actually trying to put an end to the madness

      August 5, 2011 at 11:48 pm | Report abuse |
  2. Terri

    Our current debt was NOT created NOR can an intelligent person shoulder burden Obama Admn. Bush spent HUGE amounts fighting two wars. Hussein was a terrible man BUT was NOT our priority!!! We need to stop all the political game playing, Koch brothers, partisan crapola...if we elect someone & they start that we recall them....ENOUGH ALREADY!!!

    August 5, 2011 at 9:52 pm | Report abuse |
    • The Logical Centrist

      You are right on! This is politically motivated and nothing more. The neoconservatives want to strip the middle and lower classes of any equity that may be left. They will make the USA a third world country if unchecked.

      August 5, 2011 at 9:59 pm | Report abuse |
    • Readb4talk

      Terri, you are right Bush started our debt. Obama, however, has accelerated and multiplied the debt astronomically in his 3 years. He promised us change , reduced unemployment and a growing economy. The only thing he has delivered is change – for the worse! He and his administration have been "way off" on the national economy for their entire tenure. He hasn't delivered on his representations and he always has excuses. He is simply inefective in assessing the problem, solving the problem or leading this country.

      August 5, 2011 at 10:01 pm | Report abuse |
    • Gerald Joyce

      I'm sure your superior reasoning will be recognized by S&P and they will amend their rating. Any sane person would blame the Marxist in the WH for this. If he didn't want the job he could've declined. He didn't. Suck it up and GET PEOPLE BACK TO WORK. Workers pay taxes...Unemployed collect checks. Surely even a liberal can calculate the differential.

      August 5, 2011 at 10:01 pm | Report abuse |
  3. David

    Obama must resign NOW!!

    August 5, 2011 at 9:52 pm | Report abuse |
    • retrostar1000@aol.com

      Baloney. This is one thousand percent Bush's fault as well as the crooked republicans that followed him.

      August 5, 2011 at 9:59 pm | Report abuse |
  4. Tea party crazy

    I thank the Tea party for the terror created, republicans for being stubborn, and the president for no action.

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

    My God, the Dow will be down 1,000 points at least on Monday. Obama caused America to receive it's first downgrade EVER. Obama has destroyed the stock market, destroyed the economy and destroyed America.

    August 5, 2011 at 9:53 pm | Report abuse |
    • The Snowflake Kid

      You are a typical Conservative. Conservatism has driven this country into the ground since 1980, and you are completely blind to it. It was Reagan-Bush-Bush who added $8.5 trillion to the national debt for no reason. It was Conservative presidents who invaded the wrong countries looking for WMDs that didn't exist and looking all over Afghanistan for a man who was in Pakistan watching soccer on wide screen TV.

      August 5, 2011 at 9:57 pm | Report abuse |
    • The Logical Centrist

      Keep listening to neocon talk radio, don't think for yourself, don't check any facts. The people that are really robbing the country blind love you!

      August 5, 2011 at 10:01 pm | Report abuse |
    • chris

      Yes, he did it all by himself. The impending collapse of the European economy had nothing to do with the drop in the US stock market(sarcasm). Educate yourself or shut up. Please.

      August 5, 2011 at 10:03 pm | Report abuse |
    • John

      Time to end the over whelming influence of the rating agnecies and credit bureaus. Now maybe what has been done to the US Government will demonstrate what main street deals with when a group has too much influence on the ability to recover from economic adversity. Credit Bureaus, I feel are directly contirbuting to making individual recoveries extremely difficult.

      August 5, 2011 at 10:04 pm | Report abuse |
    • Kyle

      Not sure why everyone is blaming Obama, Bush, and Clinton. Our problems started long before. Roosevelt declared our country Bankrupt by Executive Orders 6073, 6102,6111, and also by EO 6260 on March 9, 1933. On April 5, 1933, FDR issued an EO requiring all persons to turn in their gold coins, bullion and certificates on or before May 1, 1933.
      On June 5, 1933, Congress confirmed the bankruptcy through the "Joint Resolution to Suspend The Gold Standard And Abrogate The Gold Clause, June 5, 1933.

      August 5, 2011 at 10:05 pm | Report abuse |
    • paul

      "perception is reality" motto can only last for so long. time to catch up with reality wall street.

      August 5, 2011 at 10:24 pm | Report abuse |
    • NJ08052

      Hey snowflake.... did you ever wonder why the Bush govt was so sure that Saddam had weapons if mass destruction at some point...maybe because the United States were holding all the invoices because we knew what we had sold him...God Bless S&P for sticking to their guns...they said they needed 4 trillion in cuts they got no where near that...

      Raise taxes in a down economy and you would have seen S&P downgrade faster and deeper because the double dip recession would free fall

      August 6, 2011 at 12:04 am | Report abuse |
  6. Thor

    Really? This administration is upset that a credit reporting company made an error but is sticking by their guns?
    Welcome to the plight of middle class Americans. This crap happens to us "Average Joe's" everyday.
    Unfotunatly we do not have access to 485 lawyers to help us fix these erronious judgements. We have to take days off from work, fill out copious amounts of forms, send certified copies of birth certificates, deeds, mortgages, utility bills, and sometimes you have to convince them that you are not dead...regardless of what their "records" indicate.
    I am not happy with our downgrade, but it's nice to see the gov't get a taste of their own medicine. They have allowed companies like S&P, sh!!tyMortgage, Providian, Equifax,et al, to get so out of control that they can say and do whatever they choose, and us hapless folks must accept it as gospel because "You cant fight City Hall!!!!"

    August 5, 2011 at 9:53 pm | Report abuse |
    • Snookie

      good post!

      August 5, 2011 at 11:28 pm | Report abuse |
  7. Steve

    How can you balance and pay down your debt if your borrow 40 cents on the dollar? It should be down graded further.

    August 5, 2011 at 9:53 pm | Report abuse |
  8. funkeymonkey1

    Yeah. I'm sure S&P is right on. We all know what a great job they did giving AA ratings to all of those investment firms and mortgage companies that helped dig the hole we're in.

    August 5, 2011 at 9:53 pm | Report abuse |
  9. DrPete

    You people all blaming one side of the aisle for this are part of the problem. It takes both sides to be this dysfunctional. If you think one president or one party is to blame, you're delusional and fail to grasp the big picture.

    August 5, 2011 at 9:53 pm | Report abuse |
  10. Jerome

    The downgrade actually reflects the lost credibility of Standard & Poor. The U.S. is the most powerful country in the history of the world... it's currency is the world's reserve currency - where else can one turn? Plus... the U.S. prints its own money. The U.S. dollar is the standard... how can one downgrade the standard?

    Standard & Poor has joined the Tea Party, Republicans, and all the other rednecks who are racially motivated to ruin the presidency of Barack Obama.... even if America be damned.

    August 5, 2011 at 9:53 pm | Report abuse |
    • a slozomby

      huh? s&p says they dont belive that the us is 100% safe. after watching congress work on this you think we're in a good fiscal position?

      August 5, 2011 at 9:56 pm | Report abuse |
    • Bill L.

      Jerome, you are correct sir.

      August 5, 2011 at 10:04 pm | Report abuse |
    • Scouty

      You've gotta be kidding me. Pulling out the race card in this situation????? You're right. Nothing is wrong. We are all just out to get Obama because he is black. GET A CLUE.

      August 5, 2011 at 10:07 pm | Report abuse |
    • paul

      we had a crash in 08 and our rating should have been downgraded then.

      western rating agencies are partial, the crash of 08 is a proof of that.
      so to trust those agencies is incredibly naive.

      this is a retribution from europe who are tired of listening to "if you think we have it bad, look at europe"
      and also recent downgrades to greece, ireland, and portugal.
      the great west is splitting

      August 5, 2011 at 10:31 pm | Report abuse |
    • NJ08052

      Jerome... Democratic playbook... when all else fails and the only person to blame is the DEMS.. break out the old race card

      August 5, 2011 at 11:54 pm | Report abuse |
  11. I Can Read

    I told Obama and the DNC to just let ALL (and I mean ALL) of Bush’ tax cuts expire last year. This saved them over 3 trillion dollars alone and BEST of all they did not even need to vote on anything.....but NO.......Now we get this crap.
    Both parties are to be blamed and both should be downgraded permanently!!!

    August 5, 2011 at 9:54 pm | Report abuse |
  12. Socrates72

    Buncha looser's up on the hill..... It's a Joke!

    August 5, 2011 at 9:54 pm | Report abuse |
  13. Scot

    I agree with Huntsman's comment about a lack of leadership in Washington. It's all centered around the childish idiots in Congress.

    August 5, 2011 at 9:55 pm | Report abuse |
  14. a slozomby

    after watching congress the last few weeks is anyone surprised?

    August 5, 2011 at 9:55 pm | Report abuse |
  15. 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.

    August 5, 2011 at 9:55 pm | Report abuse |
    • NJ08052

      I just remember the woman on the mall on Obama's inaguaration...I took care of him and now he gonna take care of me.. Idont have toworry about puttin gas in my car or my mortgage... thes idiots that voted for him are getting change

      August 5, 2011 at 11:57 pm | Report abuse |
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