[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."
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[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.FULL STORY
Shame on the tea-baggers and their rich buddies the rethuglicans !!!! They can not stand the fact the there is a black man in charge ,,,so they have to do everything they can to denigrate him just so they can gain power,,,instead of doing the correct thing and work with a compromise,,,Well let's see how that pans out for ya in the next election tea baggers,,,Now you have not only made it harder for our government because now the interest rates will be higher but that also will pass that along to us,,,I hope you are real happy,,,looking like a fool to the rest of the world,,,I laugh at you tea-baggers rethugs,,,you are going down,,,,,Watch the wisconsin recall elections coming up if you don't think so,,,you guys deserve it,,,,pieces of dung!!!!!!
This says it all. End of story. Obama is done!
"The fact that we are here today to debate raising Americaâ€™s debt limit is a sign of leadership failure. It is a sign that the U.S. Government canâ€™t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Governmentâ€™s reckless fiscal policies."
Obama 2006 under Bush presidency
Meanhile, yesterday the U.S. just spent 60% of the debt increase - in one day.
What was the party who's been screaming for the US to get their financial house in order again?
The DEMS and OBAMA OWN the Economy! Massive debt and unemployment, record foreclosures (still), higher taxes, devalued dollar, $4 per gallon gas, lots more expensive business regulation (and obamacare has barely kicked in),and now a downgrade. And the best they can do is TRY TO BLAME THE TEA PARTY? HILARIOUS!!!!!!!!!!!
Amazing isn't it... where was that old lady that asked bush where the bombs were? WHere is the old lady that asks where the money went? And what did we buy?
The FACT is that if the debt ceiling increase were just voted on without all of the crap from the republicans – especially the tea party, then there would not have been a downgrade. The only way you can blame the president for this is if you have been living in a cave for the last 5 months.
Democracy (look it up) is based on compromise, not HIJACKING the best interest of the country because you have NO UNDERSTANDING of the financial markets. The TEABAGGERS are out to destroy this country to prove and idiotic point. I will NEVER forgive or forget what they have done to our country through their STUPIDITY and ARROGANCE. TOTAL SHAME.
remember deficits done matter...thanks you bush and cheney!!!
OK... so what happend to Hope & Change? That's what I thought. Obama didn't live up to his promises now did he? Afterall, dems controlled EVERYTHING for 2 years and did nothing about the budget. People aren't so easily fooled.
Yes good point, now all we need is the federal judges that are compassionate to drug cartels to investigate (already have their guilty) and enforce the money laundering laws. We have NO DEFICIT just judges that refuse to incarcerate the people that put us into this position to begin with. After they pay the fines we will have more money than the deficit and trillions to the positive side.................. that our federal government, they allowed it to happen and now have the answer and STILL ReFUSe to enforcE THEIR OWN LAWS. We are just like MEXICO, IT IS IMPOSSIBLE TO TURN IN HIGH LEVEL GOVERNMENT EMPLOYED CARTEL MEMBERS....EVEN WITH EVIDENCE... A LOT.
We could land on the moon but we did not have the tech to get back up, we could not lose face so we faked it, the first time.
and I bet you are a card carrying member of the flat world club too.
The DEMS and OBAMA OWN THIS MESS! Can't blame Bush, Fox, airplane owners, doctors, evil rich people or th etooth fairy any more!!!!!
Comgratulations Congress and Obama. You idiots really screwed up this time. If anyone is up for reelection I would just go an throw in the towel becasue you are going to be out on your keister. You Bozo's have no earthly idea what you just did, and then went home on vacation! You are on notice.
AMEN. I refuse to vote for anyone that is currently in office.
Thank you Tea Baggers and Republicans for the additional $130 Billion we will now be paying in interest. And thank you Republicans for 8 years of deregulation and trillions of dollars wasted on an unnecessary war that got us into this whole mess to begin with. Bloody brilliant legislating there!
Republicans are so g-damn arrogant and selfish that can't see through their greed.
Republicans are so arrogant and selfish that can't see through their greed.
OBAMA 2012: He killed bin Laden, jobs AND our bond rating!
You're an idiot.
BUSH AND CHENEY OWN THE ECONOMY THEIR DEBTS AND INTERESTGS WE ARE STILL PAYING ON!!!!
They keep blaming the GOP and Tea Party bacuse they have NO OTHER DEFENSE! 2.5 Years of OBAMA and the country is a DISASTER! Keep blaming – no one believes you!!!!!!
We are the ones to blame. We want corporations to pay high wages and follow a ton of regulations, which drives up costs on end item products. We then don't buy those products at super stores. Instead, we as Americans buy items made in China or other country. The corporations do the logical thing; they move offshore. They have to, because we as Americans scream that our 401K or retirement fund has gone down because they corporations are unprofitable.
Corporations lay-off Americans. More people on unemployment and government benefits. We raise taxes on those that are still working; who then can't afford to Buy American. Less people can afford to open small businesses to hire new people because they are paying more to cover the expenditures.
We need to start supporting U.S. businesses (large and small) by buying American and figuring out how to export our goods better.
Reality is we have to raise taxes ... on everyone. We have to cut spending ... everywhere. Until we all swallow the pill, this will get worse and the American dream will die.
TAX CUTS FOR THE RICH IN THE MIDDLE OF TWO WARS!!! THE SOUTH SURE GOT THEIR REVENGE!!!
Rate of deficit spending under OBAMA is THREE TIMES the rate under Bush. OBAMA SPENDS MORE and FASTER!!!!!!!!!