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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.
FULL STORY
thanks GOP....may you all rot in hell!!!
Because they havent had budget control in 4 years.
Both parties have screwed this country. Until you learn that, you are simply a tool.
Maybe we can get the Apes to rise up quicker and get them to run congress. They wouldn't be constantly worried about their next fargin election!!! It is a sad day for America.
Obama and the Dems did this, mostly in 2010-2011. Anyone who believes differently is totally uniformed. Take a look at the numbers sometimes when you are interested in facts.
Did you miss the part where members of both parties, but mostly the democrats, spent the country into the ground?
I'm sorry, but do you not understand that the GOP AND the Democrats BOTH had to vote and agree on the debt deal before it went through? Both parties are to blame.
You are not in touch with reality. President Obama, Harry Reid, Barney Frank, Dodd and Nancy Pelosi can be thanked for this one. It was your, not mine, Democratic leadership that changed the rules with Freddie and Fannie, blew the stimulus money, taxed you to the gills and then to top it all off shoved Obamacare down our throats. When the agencies said real cuts had to be made, the Democrats led by Obama held press conference after press conference to associate the rich as yacht owners to begin the campaign process, while Republicans and Tea Party members worked to balance the budget! You see, that is the main difference. Republicans work to accomplish goals, your Democrats just talk about it. Good luck to you, you will need it.
GOP did this? Obumma spends $4billion per day and this is GOP's fault.... lawl.... god you're stupid.
When is enough time for you to stop blaming Bush? 3 years? 5 years? Please enlighten us to your warped way of thinking. Did you forget Dems held Congress and Presidency for 2 years and spent and spent and spent?
Slective memory. Thanks Dems!
It is the GOP's fault. They've been taken over by evangelical nut cases who value more what you do in your bedroom more than common sense. CUT DEFENSE (we spend more on defense EACH year than the COMBINED defense budgets of every country on this planet. GET RID OF "FOR PROFIT" HEALTHCARE. It boosts medical costs by over 30%!! With just those two changes we can go a long way to balance the budget.
It's the "Tea Party's" fault. If they had just kept their mouths shut and never told us this was going to happen, we wouldn't be in this mess.
What are u retarded, Obama inherited a budget with 1.2 trillion deficit. The budget went out if wack because of
Bush era tax cuts, price tag 4 trillion
2 wars, 1.4 trillion
Mm and ss, increasing with older population annual cost almost 900 billion
Reduced government revenue besides tax cuts, due to recession, plus paying increased cost for unemployment, food stamps, etc .... Obama hasn't spent money on anything new, he's paying for the somethings we been paying for the last 10 years with alot less money coming in to do so, right now his admin gets 14.8 percent of GDP, bush enjoyed 17%, Clinton 18%, obMa gets 600 billions less than bush, and higher expenses for same items, plus bush already had 1.2 trillion whole
Socialism, Liberalism, Comnunism ar not good for our economy after all!
You realize Communism, Socialism, and Liberalism are three completely different things. At best, Obama is a weak Liberal.
BULL. Liberalism does not automatically equal socialism. There are many "liberals" who are fiscally Conservative. Shame the Republican Party forces you to hate taxes AND gays/minorities...
I don't see your point because we don't have any of those in this country.
YOUR KIND OF STUPIDITY IS WHY WE ARE HERE. THAT'S WHAT WE GET WHEN THE TEA PARTY HOLDS THE REISING THE DEBT CEILING HOSTAGE.
WHOEVER VOTES REPUBLICAN EVER AGAIN (UNLESS YOU ARE A MILLIONAIRE) IS COMPLETELY IDIOTIC. THE PROOF IS HERE FOE ALL TO SEE. THEY CRASH OUR ECONOMY EVERY 3 YEARS NOW....AND TO THINK THEY'VE HELD THE HOUSE FOR ONLY 8 MONTHS.
PLEASE, I BEG YOU, STOP VOTING REPUBLICAN. IT'S RUINING ALL OF US.
what a joke.
tea party's fault
Watch for a bloodbath on the stock market Monday morning.
4 straight years democrats have had full budget control, just remember that.
Takes double that 4 to clean up Bush's prodigy. What a mess he was in office.
How can Democrats have had full economic control for four years when they just got the presidency in 2008 and the GOP got House majority in 2010?
On what planet? Just this week the GOP shoved ill timed austerity measures "down our throats" to use a favorite GOP/ Teabag phrase. This is 100% the GOP's fault.
and before that the republicans had it for 8 and destroyed the surplus that they inherited....., this is the fault of both democrat and republicans inability to work together on anything. this is the main reason George Washington begged the government not to enter into bipartisan politics. he knew it would lead to all this in-fighting and destroy us. we should have listened
GS, you really that dumb? Who makes the budget? Congress. For the last 2 years of the Bush admin and first two years of the Obama admin Democrats have controlled Congress. 2+2=4.
Buzzard. The worst deficit under Bush with a republican congress was 413 billion, a third of what it was this year. So explain to me if Obama is cleaning up Bush's mess, why have the deficits under Obama and a democrat congress have been over a trillion dollars every...single...year?
Yeah don't forget about the two unpaid wars and unpaid tax breaks from 8 years of bush. And how in 2004 under bush the SEC relaxed its regulations allowing investment banks to substantially increase the amount of debt they were taking on helping cause the sub-prime mortgage crisis. Lastly let us not forget that the republicans would not even concede on a deal that involved closing tax loopholes. Yeah, that obama guy, clearly it's his fault.
Bush's unpaid tax cuts are still in effect Zagg, thanks to whining by the republicans. You can't give massive tax breaks without massively cutting government spending. Starting two wars that are still ongoing is the exact opposite of cutting government spending
They had to, the debt bill just added 2.1 trillion with no realized cuts. If 14.5 was bad, 16.5 is obviously worse.
I'm sure that once S&P check's out O'Bummer's funny math that he's been using to paint a pretty picture for voters they will reconsider. Yeah right.
Do you mean PRESIDENT OBAMA, THE LEADER OF THE COUNTRY YOU ARE IN, ... FOOL? Have some respect for the leader of your country!
Patrick, respect is earned, not automatically given. Just because he's the president does not mean that he automatically gets respect. That certainly wasn't true of George W.
So because the government became more cautious about borrowing money this drops our credit rating....
Thanks Teabaggers may all of you go to hell!
Ali, you make no sense! Tea Party people want to cut government spending and get the budget under control. Tell me how its their fault?
The country's already there, and it was the free spending 'Liberal Party" who brought us here.
Yeah, that's good. Entirely the fault of one group. For God's sake.
To answer the two below, it's the Tea party's fault because the downgrade is due to our leaders not being able to sort out problems – NOT because we are running a deficit. The deficit, while high, is not remarkable. It's our inability to comprimise that resulted in us being downgraded.
Oh, and if you really want to know why we spend so much more than we take in, look at the last decade of foolish tax policy "shoved down our throats" by the GOP. They won't even stop tax breaks everyone believes are counterproductive.
Mike, your Tea Baggers won't make dramatic cuts in defense (we spend more on defense every year than the combined defense budgets of ALL the other countries on the planet), won't reform healthcare (the for profit healthcare debacle is bankrupting our nation...France Germany and Canada do NOT have a for profit healthcare system and have a AAA rating!), and tie major cuts to their Bible influenced social programs. Tea Baggers ARE THE PROBLEM!!!
There was once a young fresh-faced presidential candidate who pledged he would scour the budget lin by line and eliminate unnecessary spending. What ever happened to that guy?
Oh, that's right. He got elected and added 4 trillion to the debt in less than 3 years. At least his fundraising is going well. And that's all that matters.
I'm very happy for him.....
Obama great car salesman and just think how easy it was to sells us a lemon.
God, you're smart.
i blame the american people.
they did this to themselfs.
all you do is blame the goverment for every little problem
but really its your fault.
you elected them.
you believe them.
democracks, republicants, everyone there all liars.
The fat lady IS singing.
Monday should be fun.
True, but this was expected.