Obama Official: S&P Move a Facts-be-Damned DecisionWorld | August 7, 2011, Sunday // 12:28| views
A senior Obama administration official has called Standard & Poor's move to downgrade US credit "a facts-be-damned decision," referring to the fact that the rating agency admitted to an error that inflated US deficits by USD 2 trillion.
"This is a facts-be-damned decision," the official told CNN. "Their analysis was way off, but they wouldn't budge."
US Treasury officials received S&P's analysis Friday afternoon and alerted the agency to the error, 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 US rating from a top score of AAA to AA+.
Other sources familiar with the S&P matter called the move political and said the decision was rushed out too quickly.
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 USD 2 trillion error speaks for itself," a Treasury Department spokesperson said.
John Chambers, head of sovereign ratings for S&P, admitted there was an error in a CNN interview Friday night, saying "we agree with the Treasury's position on this and our figures reflect that."
But he also said the error "doesn't make a material difference -- it doesn't change the fact that your debt-to-GDP ratio ... will continue to rise over the next decade," he told "AC360."
The immediate implication of the downgrade was unknown.
"Only time's going to tell how we're going to be affected," former US Comptroller General David Walker told CNN's Anderson Cooper.
"Interest rates that affect the US government ultimately can ripple throughout the economy, which is not good news given our weak economic condition already."
S&P has not spelled out what the United States has to do to regain its AAA rating, sources said.
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