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S&P downgrades U.S. credit rating
[Updated at 9:44 p.m. ET] Referring to the Obama administration's contention that Standard & Poor's analysis of the government's finances was off by about $2 trillion, a Treasury Department spokesperson said: "A judgment flawed by a $2 trillion error speaks for itself."
The Standard & Poor's rating agency announced Friday evening that it has downgraded the U.S. credit rating to AA+ from its top rank of AAA.
On Friday afternoon, hours before S&P publicly announced the downgrade, the agency revealed its plans to the Obama administration and sent an analysis to the Treasury Department. The senior administration official said the analysis inflated U.S. deficits by $2 trillion.
Treasury analysts contacted S&P and challenged the analysis, and S&P acknowledged the mistake, the official said. But S&P said it still would stick with its decision to downgrade the United States' credit rating, according to the official.
"This is a facts-be-damned decision," the senior official said. "Their analysis was way off, but they wouldn't budge."
The official the administration can do nothing now but hope that S&P's decision and analysis faces outside scrutiny.
"These guys make Congress look good," the official said of S&P.
[Updated at 8:59 p.m. ET] Credit rating agency Standard & Poor's on Friday downgraded the credit rating of the United States, stripping the world's largest economy of its prized AAA status.
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 its report Friday, S&P ruled that the U.S. fell short: "The downgrade reflects our opinion that the ... 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."
S&P also cited dysfunctional policymaking in Washington as a factor in the downgrade. "The effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges."
iReport.com: What does this mean for the U.S. economy? Share your thoughts on video.
[Initial post, 7:15 p.m.] The Standard & Poor's rating agency served the Obama administration with notice Friday afternoon that it planned to downgrade the U.S. government's AAA credit rating, an administration official told CNN.
But S&P has yet to make its ruling public, and the source told CNN the agency is reconsidering after the administration challenged S&P's analysis of the government's finances.
The source, a senior official involved in the discussions, said the agency was off by "trillions" in its economic model and was now working to revise its analysis.
S&P did not return repeated calls for comment.
The official described the talks as a "moving target" and said "it's clear some people there still want to go forward" and downgrade U.S. debt.
Rumors swirled for most of the day Friday that S&P was preparing to make its move. But even several hours after the market close, official notice had yet to materialize.
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We thepeple say "No more shananagins! Can we get back on the right track! PLEAZEEE!!!!!!!!!!!!!!!"
I read some of these post and it is really depressing Republicans this, democrats that.WE ARE ALL AMERICANS! We are like sheep being herded. Don't you all get it the Republican and the Democratic Party have demonized each other not because they hate each other but because it keeps the American electorate separated. Doesn't any one notice that this all started when Ross Pero won 20% of the vote in the 90s. It scared the hell out of both parties and they got together and asked themselves how can we make sure our base never votes for the opposing party? How do we make sure that they do not vote for a third candidate? Introduce hate, demonize the other party. Gather a group of voters/people and remind them of better days and tell them how our country is so bad now and point at the opposing candidate and tell them he is to blame for your lot in life, for all the problems in the country. We the American voters is to blame, we keep voting for extrimist in both parties, we keep electing the same officials that created the fiscal problems we have today expect change.
P.S I do not think Obama is a bad President, the six months prior to him taking office we were shedding on average eight hundred thousand jobs a month. Under his administration in 2 1/2 years Obama has created over two million jobs. Is it as much as I would like no but it far better then what was going on the six month prior to him taking office.
I was just reading some of the post on this blog and I want to provide some information from the Congressional Budget Office and the Goverment Accounting office.
1. 25% of the increase in our debit under Obama Administration is due to the Bush Administration Tax cuts. There was a increase in unemployment meaning that that there less taxes collected, the job creation and the growth that was forecasted by The Bush Administration due to the tax cuts never materialized. The Bush tax cuts were in place the first two years of the Obama Administration
2. The Obama administration is forecasted to have over a one trillion dollar budget deficit this year but nearly Three Hundred and Fifty Billion dollars is due to the extension of the Bush tax cuts last December.
Please people go to the CBO and GAO websites not to CNN, FOX! NPR, or Rush Limbaugh for your facts. It is time consuming to find it on the CBO and GAO websites but if you have time to blog or go on Facebook you certainly have time to research FACTS regarding important legislation and issues.
Yes, the Bush tax cuts are partly to blame. But why didn't Obama and the Dems let them expire December 2010? They had control of both the house and senate and the presidency, and they wouldn't of had to do anything to let them expire. But instead, they voted to extend them, even for those making over 250K per year.
Paul, because Pres Obama had to make a deal with the GOP to extend the Unemployment Insurance for all the Americans that were about to lose their lifeline.
Why did he need to make a deal? They had control of both the House and Senate.
Jobs, jobs, jobs, please get back to what is really going on and who can believe S&P when they could not even see what was going on with the real estate market? Think people it was a roust and the Tea Party, GOP, Democrats are out of touch with the people!
If you are lending money to the US or buying US tresuary bonds you are a RETARD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!