SCOTT SIMON, Host:
Coming up, we'll discuss the potential economic fallout of the downgrade, and we'll have a report on the flat job market. We'll start with NPR's White House correspondent, Ari Shapiro. Ari, thanks for being with us.
ARI SHAPIRO: No problem. Good morning, Scott.
SIMON: And S&P said it was politics more than economics that was the driving factor behind their decision. Trace that out for us, please.
SHAPIRO: But that was not enough for Standard & Poor's. According to last night's press release, the deal does not do enough to reduce debt in relation to gross domestic product, and S&P, as you mentioned, says the political process left the agency unimpressed as well. The statement from the agency says the political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective and less predictable than what we previously believed, leading to the credit downgrade.
SIMON: The Obama administration was, I think it's safe to say, openly indignant.
SIMON: Although that seemed to come from the Treasury, not the White House. Tell us about reaction there.
SHAPIRO: Now, what makes this really interesting, is that Treasury apparently found a big math error in Standard & Poor's accounting. A math error of some two trillion dollars. They went back to Standard & Poor's and said, hey, look, if you fix this, then the long-term ration of debt to GDP flattens out, and the economic problem that you're describing doesn't actually exist.
SIMON: 00 PM yesterday.
SIMON: So is Treasury trying - forgive the expression - to discredit S&P's decision making?
(SOUNDBITE OF LAUGHTER)
SHAPIRO: Obviously nobody in the government wants to see the U.S. credit rating downgraded, and so it's to be expected that they fought tooth and nail against that decision before it came out.
SIMON: And any indications Moody's, Fitch, the other ratings agencies will follows?
SHAPIRO: Not clear. The other two big ones are Moody's and Fitch. They have not changed their rating of U.S. credit at the moment. That could change, or S&P could end up being the outlier. Even S&P says it could downgrade American credit further in the future. Basically the message to America's political leaders is step up and fix America's fiscal policy. If you do, the U.S. could regain its AAA rating. If not, things could get worse.
SIMON: NPR's Ari Shapiro. Thanks.
SHAPIRO: You're welcome. Transcript provided by NPR, Copyright NPR.