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. Mirus3

    Independent proof that Obama's numbers and economic policies are "deep and fundamentally" flawed.

    August 5, 2011 at 10:04 pm | Report abuse |
    • The Snowflake Kid

      "Independent proof?" That is ridiculous. This was a blatantly political decision by the rating agency. S&P had openly shown itself to be a branch of the Republican Party.

      August 5, 2011 at 10:06 pm | Report abuse |
    • Tadpole

      snowflake So you still seem to think, even after the fact that our debt is closing in on our GDP, that we still deserve a AAA rating. I'm sure you think that Obama still deserves an A+ rating for his stellar work.

      August 5, 2011 at 10:15 pm | Report abuse |
    • brenda copley

      Happy birthday to you, OBAMA, THE FIRST PRESIDENT TO HAVE A DOWNGRADE IN OUR CREDIT!!!! ITS ALL ABOUT TO HIT THE FAN, WE BETTER GET READY.

      August 5, 2011 at 10:19 pm | Report abuse |
    • Mark C

      Right, moron, like their rating of junk mortgage derivatives as AAA a few ago was "indpendent proof" that they were rock solid, right?

      August 5, 2011 at 10:20 pm | Report abuse |
  2. I Can Read

    OK you win – I lost hope – now where is my change – thats right – that is what my savings are now worth

    August 5, 2011 at 10:05 pm | Report abuse |
  3. primarea

    Now they want to downgrade us. Where was S&P when the banks and investment house were running wild. And where were they when bush and the republicans double the deficit and debt

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

      OBAMA IS GOING DOWN AS THE FIRST PRESIDENT EVER IN OUR HISTORY TO HAVE AMERICA'S CREDIT DOWNGRADED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!HAPPY HAPPY BIRTHDAY TO YOU, OBAMA, IT IS JUST BEGINING.

      August 5, 2011 at 10:21 pm | Report abuse |
    • Mark C

      Wow, Brenda you sound really happy about it. Typical GOP/Teabagger jack@ss - rooting the the US to fail.

      August 5, 2011 at 10:30 pm | Report abuse |
  4. Thor

    Cutting spending is all well and good, but it doesn't go far enough. These Tea Baggers refused to budge on such a simple math problem, and their idiotic stubberness put our credit rating in jeopardy, damn near in the toilet!!! Heaven forbid we ask the upper crust of society to throw us peasants a few crumbs...And don't give me the ole Repubic line that raising taxes on the rich will stiffle job growth. I can't see how taxing a wealthy persons PERSONAL income is going to affect his companies bottom line. Except for the fact that he might dip into the company coffers to offset his "losses"

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

    Both parties have destroyed what little faith people have in our process. The credit agencies were looking for cuts of around $4 trillion. Congress did not deliver. They cut our rating. Surprise? No.

    We should have raised income taxes across the board for ALL citizens (not just the wealthy) and then cut another $3 trillion immediately.

    Thanks S&P. Now, perhaps, the powers in Washington get the message.

    August 5, 2011 at 10:08 pm | Report abuse |
    • aaa

      Agreed. Now the tea loosers have finally lost their clout. Pull out all the stops Obama and set this straight once and for all. Grand bargain and new deal 2011 is coming. Loopholes gone. Corporations pay finally. Flat tax now.

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

    Hey I posted a comment and this liberal backed website and they didnt post it...HMMMMMM

    August 5, 2011 at 10:09 pm | Report abuse |
    • The Snowflake Kid

      Hmmmm...you moron. They have a dirty word filter. They don't censor for content. A computer program rejects posts that have dirty words or phrases. Get a thesaurus. Get a library card.

      August 5, 2011 at 10:11 pm | Report abuse |
    • The Snowflake Kid

      Do you actually think that all the global media corporations in the world – Time Warner, Disney, GE, Bertlesmans, Sony, and all the others – are in a world-wide socialist conspiracy to suppress the Truth of Conservatism? Do you realize how stupid that sounds?

      August 5, 2011 at 10:13 pm | Report abuse |
    • NJ08052

      let's see how the liberal backed media spins this one so it is not the Hip Hop BBQ Party host's fault...

      August 5, 2011 at 10:24 pm | Report abuse |
  7. The Snowflake Kid

    If the stupid Republicans had simply voted to raise the debt ceiling without all that drama, this would never have happend. This is 100% the fault of the Tea Party Crazies – and the political operatives at S&P.

    August 5, 2011 at 10:10 pm | Report abuse |
    • brenda copley

      THIS IS OBAMA FAULT, ALL HE WANTS TO DO IS SPEND SPEND AND SPEND MORE, HE MOVED THE GOAL POST ON THE FIRST AGREEMENT TO RAISE THE CEILING WHEN THE REPUBS BROUGHT IT TO HIM, THIS IS HIS FAULT, HE KNEW THEY WANTED TO SEE 4 TRILLION IN CUTS, NOT 1.2 TRILLION IN FAKE CUTS. HAPPY HAPPY BIRTHDAY TO YOU MR. PRESIDENT!!!" THE FIRST PRESIDENT TO HAVE THE CREDIT RATING OF THE UNITED STATES DOWNGRADED.

      August 5, 2011 at 10:33 pm | Report abuse |
  8. Bill L.

    There was no more money to be made on the upside in this market, The liars, cheats, and thiefs of wall street
    came up with a brilliant plan to tank the market and make a killing shorting the market.
    Instant gratification the drug is money. God help us all.

    August 5, 2011 at 10:11 pm | Report abuse |
  9. Giant Panda

    Hats off to G.W. Bush's wars, tax cuts and the Tea Party thugs! You broke it!

    August 5, 2011 at 10:12 pm | Report abuse |
    • NJ08052

      Wake up Giant PANDA and stop blaming Bush...the WARS didnt cause this... Dems had the Congress for 6 years...ful control of the government and instead of the economy the rammed healthcare down our throats and spent more money in Obamas first couple of years then Bush did all 8 of his....WAKE UP

      August 5, 2011 at 10:20 pm | Report abuse |
    • Mark C

      Uh, actually moron, the Democrats had the Congress for four years.

      August 5, 2011 at 10:22 pm | Report abuse |
    • Mark C

      And no, moron, they did not "spend more money in Obama's first two years than Bush did in eight." Seriously, you need to have a room-temperature IQ to believe that.

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

      I did wake up today - in another country. I'm an American in Canada and they, like most of Europe and Asia, are puzzled as to how the Tea Party even made it into the House, let alone allowed incredible leverage there.

      August 5, 2011 at 10:30 pm | Report abuse |
  10. Zious

    The S&P is not way off. It's you Mr. President and Washington who are way off and always have been off. For 3 years since the crisis you have been sitting on your a$$$$ doing nothing but printing money and pumping up the stock and commodity markets. Now that the world has accepted your failure you are still living in the fantasy world not willing or ready to accept facts, Mr. President. You have been a big failure because you hid behind the curtains letting whoever make the decisions. This is your Waterloo. The world thought that Bush was bad but you turned out even worse. Your failure to lead, to set the agenda, to make your authority known has lead us to the worst times of our lives. You can blame Bush all you want but Democrats are as much responsible and your failure to address the issues have caused this situation to get out of hand. Hillary Clinton would have been a better President any time.

    August 5, 2011 at 10:13 pm | Report abuse |
  11. NJ08052

    God Bless S&P for doing their job and making the difficult decisions....seems OBAMA and the Democratic Senate couldn't –BALANCE THE DAMN BUDGET- The out of control DEMS are going to cry that the poor need this and the poor need that... and that the Repubs dont care about Grandma... if only they would have done their... YOU CANT SPEND $$$ YOU DONT HAVE OR EXEPCT THE RICH IN THIS COUNTRY- WHO ALREADY ARE FOOTING THE BIGGEST CHUNK OF THE BILL- TO JUST ROLLOVER AND GET SCREWED DEEPER... INSTEAD OF LOOKING FOR A GOVT HANDOUT... MAYBE PEOPLE SHOULD GET UP OFF THEIR a$$es PULL UP THEIR BOOT STRAPS AND MAKE SOMETHING OF THEMSELEVES INSTEAD OF A WELFARE COLLECTING COUCH POTATO– I PLEDGE ALLEGUENCE TO THE NANNY STATE OF AMERICA-brought to you courtesyof OBAMA and the DEMS

    August 5, 2011 at 10:17 pm | Report abuse |
    • Mark C

      You really are a gigantic, gaseous imbecile. The 400 richest people in the country paid a whopping 18.1% in income taxes in 2008.

      August 5, 2011 at 10:25 pm | Report abuse |
    • NJ08052

      Mark C ...keep blindly believing that the GOVt can solve everyone problems...you want to call me a moron...go ahead it is your right in this country (for now)...just remember that this economy and OBAMA's lack of leadership, forced HEALTHCARE and PELOSI and REID have given you this CHANGE. Changing this country from the greastet nation to a nanny state... The DEMS keep funneling money to the morons whose parents never taught them self-reliance.

      August 6, 2011 at 12:30 am | Report abuse |
  12. Shannon

    So when all the doomsday and political ideologue name throwing what do we end up with? No one was worried about government spending during the election. All the sudden someone yelled fire in a movie theater and the failing Republicans had finally a gripe to complain about. Except the whole reason our "credit rating" was downgraded was because Republicans would accept tax increases. Albeit even though the rich are richer and the poor are poorer than they have been in this country in fifty years. We call this wag the dog. Remember people, the economy cannot get better until people spend money, people cant spend money without jobs. Some money spending and jobs leads to more money spending and jobs. To think that the rich (or the poor Republicans that really believe that one day they too might be rich and only are Republican because they side with one or two "conservative values") actually give a crap about the downgrade is hilarious. They have their money buried in foreign companies like HSBC which will allow the rich here to invest in companies abroad which will raise interest rates on loans to the USA and make even more money off of a failing housing market. If you think the Republicans are doing you a favor, you need to reevaluate the end game folks. Its not Marxism or Socialism you should be scared of. Its Imperialism and Feudalism. There will be only two classes soon enough.

    August 5, 2011 at 10:17 pm | Report abuse |
    • Shannon

      Government spending i.e. social benefits go directly back into the economy. Give a starving person or a sick person fifty bucks and Im pretty sure they're not putting it away in a Swiss bank account somewhere. Give a rich person a tax-break and especially now after the downgrade, do you think they're going out to spend it? that's not how they got rich in the first place.

      August 5, 2011 at 10:21 pm | Report abuse |
    • NJ08052

      Give a sick person or starving person fifty bucks and they begin to expect that money instead of getting off their a$$ the real unemployment number is over 16 % when you add back people that have given up looking for work...stop giving these people money give the rich an indication what the rules are and they will start investing/creating jobs again... Steve Wynn who voted for OBAMA is even po'd becaus he is being held prisoner by this economy... but I guess this is the economy we get from a person who never ran a business but only community organized

      August 6, 2011 at 12:21 am | Report abuse |
    • NJ08052

      ohh btw Fannie and Freddie... do you know who rec'd thee most political donations from these orgainizations that that were at the heart of the mortgage crisis...? his name starts with an"O" and ends with and "A"

      August 6, 2011 at 12:23 am | Report abuse |
  13. KenC

    The downgrade is utter nonsense. There is zero risk of default. The S&P knows this, but they are doing this to appear tough, after they got so much criticism, deserved, for being asleep at the wheel when rating subprime debt packages.

    August 5, 2011 at 10:19 pm | Report abuse |
  14. TRISH ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

    Hey, will you guys visit HelpFaye.ORG a friend of mine is fighting for her life... Thanks

    August 5, 2011 at 10:24 pm | Report abuse |
  15. get real

    lets just get this election for president over with.....go obama 2012.

    August 5, 2011 at 10:26 pm | Report abuse |
    • NJ08052

      Jan 2013 the end of an ERROR...

      August 6, 2011 at 12:16 am | Report abuse |
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