S&P told White House it would downgrade U.S. – official
August 5th, 2011
06:56 PM ET
3 years ago

S&P told White House it would downgrade U.S. – official

NEW YORK (CNNMoney) - 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.

FULL STORY

Filed under: Debt • Deficit • Economy
soundoff (47 Responses)
  1. Goodbye Republican Party 2012

    I will never forget the destruction the Republican/TEA party has caused to this Great country.

    August 5, 2011 10:36 pm at 10:36 pm |
  2. Boo Hoo Baynor

    This has ensured the extinction of the Republican Party.

    August 5, 2011 10:39 pm at 10:39 pm |
  3. republicansareputas

    So it seems that Republicans might get their wish in making Obama look bad. THEY SHOULD ENJOY THEIR TEMPORARY TRIUMPH. BUT THEY LIVE ONE BIT OF INFORMATION; THAT IF THE PRESIDENT FAILS THEY ALL FAILS. THEY MIGHT REGAIN THEIR POWER BUT I AM WILLING TO BET THAT THE DAMAGE THEY HAVE DONE TO THE COUNTRY TO GET WHAT THEY WANT WILL BE TO BIG FOR ANY OF THEM TO FIX. THE AMERICAN PEOPLE WILL HELD THEM ACCOUNTABLE FOR IT. AND ITS NOT GOING TO BE A PRETTY PICTURE.

    August 5, 2011 10:41 pm at 10:41 pm |
  4. Indy

    It has been said for years that the Bush administrations spending would come home to haunt every American and you can add Obama to the blame list but you can be 100% sure that the Republicans can take a massive amount of blame for their recent hostage taking of the economy, combined with the Bush years they have a major amount of fault. I am positive that Republicans will come out with insults galore and blaming the guy that inherited this mess and that will backfire on them like they wont believe.There is enough credible information available to people and Republicans will not be able to lie their way out of their well deserved blame. Without raising taxes and stopping the most destructive tax breaks in history the deficit and credit rating will never be resolved.Republicans allowed themselves to be controlled by the Tea Party and made the country look like chumps by not raising the debt ceiling and allowing negotations with sensible compromise.

    August 5, 2011 10:45 pm at 10:45 pm |
  5. Rick in OP

    Obama is toast.

    August 5, 2011 11:01 pm at 11:01 pm |
  6. The First Ever

    Well, this President is certainly a First.......the First Black President, the First President to spend more money in 2 years than ALL our other Presidents combined. First to openly/publicly Demean our great country.....First to Unashamedly Divide our nation through Class Warfare......and NOW he becomes the First President to bring our nation's good credit rating down....ever....never before has this happened in our great history!
    That is bad enough, but worse is he & the Democratic Party will NOT accept responsibility nor change direction! They will come out next week & blame Republicans, who hold only 1/3 of Congress& hasn't been in power for years.......and of course Bush will also be blamed......
    It's not Always good to be FIRST!

    August 5, 2011 11:14 pm at 11:14 pm |
  7. larry

    If the s&p was a person it would be a republican so who cares what their rating is

    August 6, 2011 12:10 am at 12:10 am |
  8. Tea Party Mike

    There is a ticker about a CBS/New York Times poll. Posting is closed so I will share my thoughts here.
    In a recent CBS/New York Times poll, those who say they are part of the Tea Party movement polled at 18%. I checked and only 24% of those polled were Republicans and only 32% were conservatives. Those numbers might be correct for New York or California, but for the Nation about 33 to 34% are Republicans and 40 to 42% are conservatives. So on a poll with correct proportions I would guess 20 to 25% of Americans align with the Tea Party.
    Liberal Democrats would like everyone to believe that is just a small crazy fringe. But even if the 18% number is true, that is no small fringe. Unless liberal Democrats consider themselves a small fringe. Only 20 to 21% of Americans are liberals and about 34 to 35% are Democrats.
    So about two thirds of Democrats are liberals and about two thirds of Republicans are aligned with the Tea Party.
    Liberals control the Democrat party and at two thirds of the party is no fringe.
    Not all of those who consider themselves to be part of the Tea Party are Republicans, many are independents. But I bet at least half of Republicans are also part of the Tea Party.
    The Tea party is no more a fringe group than liberal Democrats. They have real power, they represent somewhere between 1 out of 5 and 1 out of 4 Americans, about the same as liberals.
    The Tea Party is here to stay and they have proved they can make a difference. Calling them names won't make them go away. And they believe that a compromise that does not produce a solution is not a comprise worth making.

    August 6, 2011 12:15 am at 12:15 am |
  9. The Lone Okie

    S & P is just making a Hedge Fund derivate swaps turn them into the first trillionares. Thanks tea party....

    August 6, 2011 12:23 am at 12:23 am |
  10. ABM

    Thank you GOP and tea party. You helped destroy our economy because you could not accept you lost the presidential election. I am hoping the American people will help them accountable just like I will.

    August 6, 2011 12:38 am at 12:38 am |
  11. WTF?

    The Tea Party and the Republicans hostage taking strategy has proven to be very damaging to our economy. The down grade was never a threat with 111 Th congress because the Democrats new the consequences. The Tea Party apply their 7 Th grade understanding of the constitution to to our complex economy and is wrecking havoc in 6 short months. If you want your jobs back vote for Democrats. Or continue to be a hostage to the Tea Party.

    August 6, 2011 12:58 am at 12:58 am |
  12. tawaune

    THE REPUBLICANS ARE KILLING US ALL.

    August 6, 2011 01:04 am at 1:04 am |
  13. J.V.hodgson

    S&P is not a government agency it can do what it likes to do. This is free market economics at its worst or best. My guess is Moodys and Fitch will not follow suit, at least not yet.
    Simpson Bowles, gang of six and president Obama with the so called big " balanced deal" asked for $4trillion in all areas for government spending and income.
    All the rating agencies said that was minimum to avoid a downgrade.
    Enter the dysfunctional politics of the House and Senate, remembering the tea partiers did not want any increase of the debt ceiling (they were and are living in fantasy land) it's not the way the financial system or government works for the last 30-40 years, and that is true Internationally not just the US. Ther might just be good economic reasons why!?
    Never mind also no increases real consequences/ effects on social security ,military pay, medicare and medicaid in fact any government employee, and that it would guarantee a double dip recession of huge proportions. The less obvious but related matters like credit card rates mortgage rates interest rates on US debt rising would have made the US a third world economy almost overnight , unemployment would soar, and done nothing to repay the debt other than $900 bn. If $4trillion or at best + $1.5tr+ $0.9tr from the proposed gang of 12 was not enough to deter the downgrade by S&P they were perfectly correct to point to a dysfunctional political process ( both sides guilty as charged) and that tax revenues ( as many other Economists agree) have to be part of a viable debt and deficit deal without bringing about a double dip recession.
    Lets us also remember please the $14TR in debt is not all Obama's doing, it was many trillions when he took over.
    The largest causal elements of that being Wars ( continuing policy by obama of Bush poicy mainly) and " temporary tax breaks" plus huge government tax refunds to certain vested industries like Big oil... and we know where that support comes comes from "black gold and texas tea."
    Well the tea is cold and time for all the US to take some gold back when it's 5 bucks a gallon.
    Over 10 years I heard two figures for this Income temporary repeal +$950BN ( rich $400BN) =2 %, people 3.4m get 42% and the rest 58% people163m. (Based on 15m unemployed = 9.0% ( qed 15m/0.09 =167m employed population ) and another $0.4 tr of tax credits / give aways. HMmm I see a solution here with little or no economic downturn risks.
    If Republicans (and CNN apparently, who mostly and predominantly use Republican leaning economists as experts) see any of the above as win win for the Presidency or House and Senate votes in 2012
    Ac 360 Castellanos today was right.
    Regards,
    Hodgson.

    August 6, 2011 01:55 am at 1:55 am |
  14. kat

    BHO at it's best! The beginning of the end for the USA Why would anyone want to give him 4 more ?

    August 6, 2011 02:06 am at 2:06 am |
  15. Russell Brown

    a false balance is abomination to the lord
    but a just weight is his delight
    american will never be destoryed
    from the outside
    if we falter and lose our freedom
    it will be because we desroryed our self.
    what happen to america why did she go back to evil
    does she not belive in Jesus ..

    August 6, 2011 03:39 am at 3:39 am |
  16. Russell Brown

    but my G-D shall supply ,
    all your needs according to his
    riches in glory by christ Jesus.

    August 6, 2011 03:44 am at 3:44 am |
  17. T'sah from Virginia

    "...But S&P has yet to make its ruling public..."

    But they did make it public and it was BREAKING NEWS!! I listened to Fox and CNN to get different views. CNN actually had an exclusive interview with Chambers – the person responsible for the downgrade – and he gave his opinion as to WHY! Chambers – even after being told there was a $2 trillion dollar error in their numbers – he still downgraded the US to an AA+ status – WHERE is this all coming from???????!!! America WAKE UP!!!

    NOW – I will not state the reasons why Chambers still downgraded the US – you will hear that for yourself. However, I will say it did not take long for the Republicans to come out and SLAM President Obama!!!!! Fox News – on Greta's show – had "everyone" come out and their criticism was "outrageously" WRONG – IF you consider what Chambers said as to the reason why they went ahead with the downgrade – the RIGHT got it “all WRONG”!!!

    Every last Republican – MITTens – Bachmann – Palin – Pawlenty – and even TRUMPet all came out with statements and every one of them blamed President Obama!!!! NONE of them reflected on what Chambers said – which was entirely the complete opposite of what they were spewing!!! Bachmann and Palin went way off the deep, Deep, DEEP end and ignored 100% of what was really behind the downgrade!! OMG – Ignorance at its best!!

    CNN took a different approach and had a panel to DISCUSS the issues! Everyone on the "panel" looked at all sides and was more in gear as to the REAL reason why we lost our rating!!!

    Since BOEHNER got 98% of what he wanted – then this downgrade – in my opinion – belongs to HIM and the Republicans who felt they needed to take America HOSTAGE in order to DISRUPT the steady flow of "recovery" that was already in progress under President Obama over the past 2 years!!! A steady flow of recovery that was WORKING until 2011 when the Republicans took control of the HOUSE!!! ............................... THINK ABOUT IT!!!!!! And on top of it – just WATCH and you shall see – they will continue to BLAME President Obama ONLY – not themselves, not the Tea Party, not Congress... Their main goal is to make President Obama a one-term President – They DO NOT care if it means “crashing” the market or losing our credit rating – You heard them, the TP at it best – “Don’t raise the debt ceiling – let it CRASH!!!!!” And it did CRASH!!!

    August 6, 2011 04:07 am at 4:07 am |
  18. Rudy NYC

    Translation: The US economy is less stable than the people running it.

    August 6, 2011 06:57 am at 6:57 am |
  19. Jeff in Virginia

    Is there a reason why these articles are ignoring the statements from the S&P regarding the REASONS for this downgrade?

    They explicitly said that this was caused by their belief that taxes can no longer be raised in this country. Gee- who is fighting for that?

    August 6, 2011 08:21 am at 8:21 am |
  20. diridi

    Just like inside trading, inside fighting with GOP drama, caused this mess. so, GOP idiots are held responsible, and accountable....true, true, true, true.....

    August 6, 2011 09:37 am at 9:37 am |
  21. Boo Hoo Baynor

    The Standard and Poor's decision to downgrade us now seems suspicious. More attempts to demoralize Americans and destroy President Obama.

    August 6, 2011 10:16 am at 10:16 am |
  22. "The first shall be last"......

    Mr President.....YOU really are a "first" on many areas.....first black president, first to spend more money than ALL other Presidents....COMBINED,......first to public ally demean & despise our great country....now you can claim another "first", First President to reign over our "first" credit downgrade!
    It's not always good to be first.

    August 6, 2011 10:27 am at 10:27 am |
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