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. Amber

    Obama says the analysis is "way off?" As if he EVER had a clue. I'm surprised the rating agencies hadn't reduced the US rating well before now. The incompetence in DC is absolutely appalling. The GOP should have pushed for a balanced budget amendment but they were too afraid of not getting any deal in the last remaining minutes. Some deal was better than no deal. Ask the DEMS WHY they don't want a balanced budget amendment and make them defend the fact that they want to continue spending this great country into oblivion. Sure wish Ayn Rand were still around. She could set these dysfunctional liberals and their dictators straight. Her time is now. More people need to get educated on the evils of communism and socialism and it needs to be cast out of this country. We can't take any more of Obama's hopey changey deal.

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

      Perhaps you should leave talking politics to the adults, or at least the educated and informed.

      August 5, 2011 at 9:58 pm | Report abuse |
  2. EYERIS625

    OSAMA BIN LADEN HAS WON!! HE AND HIS FOLLOWERS WANTED TO DESTROYED THE US AND HAVE SUCCEDED.. THOSE IN CHARGE IN DC CLOWNING AROUND WITH OUR LIVES. THIS IS WHAT OSAMA WANTED.

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

      Osama Binladen used the GOP and Tea party traitors to destroy this countries credibility. We should kick these guardians of corporation who took the manufacturing to China and elsewhere and bringing back the products and dumping it on the Americans. Republicans are no patriots. They are bunch of greedy vultures.

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

      I don't think he wanted that to happen. I just think he is inept. He is surely filling the inept shoes of his predecessor.

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

      Yep. Bin Laden won. Good for him and Al Qaeda taking down the enormous elephant of a government we have. They were too busy fluffing each others rear ends to make any real decision on anything. I've never seen something so dysfunctional. You could maybe compare the US government to a 20 member redneck trailer trash family living in the same double wide. I hope we get nuked and put out of our misery. This virus we call the United States needs to be killed off immediately. Why delay the inevitable. The system is just sick and doesn't work. We're going to end up like Mexico within 2 decades where the top 2% control 98% of the wealth. The economy will never recover. It's real simple people. High gas, food, and energy prices are killing us. Ben Bernanke is a joke. His economic analysis is so off and his textbooks suck. Obama is nothing but a puppet. The politicians don't make the decisions. Big business and the elite control the world. They think they will take it over but in the end they will fail miserably to their horrible deaths. A lot of them will be hanging dead from trees. The human species experiment needs to be terminated by the architect of this matrix game. There is no god. No way. He would not allow such BS to happen. All the wars, misery, famine, poverty, homelessness, fear, greed, crime. I just can't believe.

      August 5, 2011 at 10:09 pm | Report abuse |
  3. TeaSucks

    Thanks to the Tea Party and GOP! It took a team effort of "no compromise and no surrender" for you to screw the US credit rating after 100 years!

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

      It's the left that would prefer this country to abandon capitalism for pseudo-communism. The Tea Party is all for the U.S. credit rating being as high as possible.

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

      Wow, did you finish grade school? How can you be so out of touch with reality? The downgrade was the result of too much debt and a debt deal that didn't go far enough to cut spending. You could have placed some blame on the tea party if they had voted against the last bill that passed and held it up and it resulted in the money train running out of steam. But the bill was passed and all debts are being paid. That is not the reason for the down-grade, its the DEBT!

      August 5, 2011 at 10:02 pm | Report abuse |
    • TeaSucks

      Keep drinking your tea until you drown in it.

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

      87 Tea party a$$ holes are at recess after screwing up the economy of this country. Ba-stds

      August 5, 2011 at 10:10 pm | Report abuse |
  4. HH

    Unveil a smaller more efficient federal government Mr. President not another sound bite of hope and change then get out of the way.

    August 5, 2011 at 9:56 pm | Report abuse |
  5. ahleucha

    If you vote for a political party, you are voting for the destruction of America and the world economy. YOU ARE THE PROBLEM.

    August 5, 2011 at 9:57 pm | Report abuse |
  6. Dale

    idiots. oh yeah, it can't be. you must have run the numbers wrong. haha. what part of 20T deficit by 2020 doesnt obama and his cronies understand?

    August 5, 2011 at 9:57 pm | Report abuse |
  7. lw89

    Who cares about the "facts". We should have never gotten to a point where our credit rating was threatened. The whiny unnamed Obama Admin official sounds like a coach complaining about the referees in a basketball game.

    Attention Obama Administration: Amateur Hour is OVER.....

    August 5, 2011 at 9:57 pm | Report abuse |
  8. David

    HOPE AND CHANGE BABY!!!!!
    ...hope and change

    August 5, 2011 at 9:57 pm | Report abuse |
  9. Roy

    No, what is needed in washington, is for the elected officials we the people sent their to do their jobs, DEMS/GOP, stop all these side show stunts and do your dam job.

    August 5, 2011 at 9:57 pm | Report abuse |
    • David

      too late

      August 5, 2011 at 9:58 pm | Report abuse |
    • The Snowflake Kid

      Why can you not see that they do not agree on what their job is. One group feels that it should govern wisely and the other group believes that it should destroy government. They two sides have been shouting that at the top of their lungs since 1932 and you still haven't listened!

      August 5, 2011 at 10:00 pm | Report abuse |
    • Kay

      I couldn't agree more. They need to stop being petty and trying to prove a point of dislike or disdain for the person in office and think of the entire Nation.

      August 5, 2011 at 10:03 pm | Report abuse |
  10. MJ

    I agree– S&P's downgrading is way off. They should downgrade to CCC for a more realistic appraisal. There's no way in hell we'll ever repay the $16T. We will default, either outright, or through currency devaluation.

    August 5, 2011 at 9:57 pm | Report abuse |
  11. Rodger

    The only thing worse than greedy Republicans are ignorant Republicans.

    August 5, 2011 at 9:59 pm | Report abuse |
  12. I Can Read

    Should have just let ALL the Bush tax cuts expire.....this did not even require a vote back in 12/2010 and saved over 3 trillion alone..........

    August 5, 2011 at 9:59 pm | Report abuse |
  13. Remember three years ago

    Isn't this the same rating agency that looked at packages of securitized subprime debt and gave it an "A" rating? II'm not putting much faith in their rating abilities.

    August 5, 2011 at 9:59 pm | Report abuse |
  14. DBC

    Mr President, if you would spend more time introspectively evaluating your contribution to the downgrade and less time blaming everyone else, you might actually understand S&Ps evaluation. Your Banana Republic leadership of an inept process that resulted in failure to pass a budget in over 800 days and the spending of 40 percent more than we take in, does not exactly inspire visions of world class fiduciary performance. You wanted the job, you spoke of change, you spent more than any President in history, and now the buck stops with you. Mr President, on behalf of my children who have no voice, thanks. They now inherit the burdens you have placed squarely on their shoulders and they will spend a lifetime fixing what you have presided over in Washington. Mr President, Your Hope will ring hollow with them.

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

      Where is G. Bush, Chenny, and Rumsfield team who destroyed the economy of this country? These criminals are in hiding.

      August 5, 2011 at 10:08 pm | Report abuse |
  15. Linda

    We the people of these United States need to realize its time to stand together and take back our Country, Cities, Towns and Streets. We have been laid back to long thinking not here, not in our Country, not to us a Free Nation. Well guess what, it is upon us Americans.

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

      I agree with Linda. Time to re-shore our jobs with major tax breaks to corporations bringing jobs home and MAJOR tax increase/penalties for those who do not within a 6 month period. Make it extremely expensive for corporations to continue to support off-shoring of our jobs. Restore our tax revenue by bringing jobs home. There is an initiative to re-shore our jobs and this needs to now be heavily influenced by tax and penalties.

      August 5, 2011 at 10:18 pm | Report abuse |
1 2 3 4 5 6 7 8