(WASHINGTON) -- The public blame game over Standard & Poor’s downgrade of the United States’ credit rating continued to rage Monday.
It was an expensive day on Wall Street, as $2.3 trillion was lost in stock market wealth by the sound of the closing bell. As President Obama addressed the nation for the first time since the downgrade was announced on Aug. 5, the Dow Jones industrial average dipped below the 11,000 mark.
In an exclusive interview with ABC's Nightline, Director of the National Economic Council Gene Sperling ripped apart the S&P’s report, calling it “irresponsible” and “reckless,” and claimed the rating agency rushed through its assessment.
“[S&P] simply changed their press release,” Sperling said. “They simply decided on the spot that they had a different lead rationale for why they were going to downgrade the United States. That was very irresponsible thing to do and a bit reckless to do at a moment of such fragility in the markets.”
That “fragility” certainly proved true on Monday, when S&P also announced it was downgrading the government-backed mortgage debt. As a result, the stock market faced its biggest plunge since 2008. The Dow closed down 634 points, the S&P 500 lost 79 points and the Nasdaq ended 174 points lower, dropping almost 7 percent.
Sperling said Obama’s economic team’s biggest worry was that the downgrade would have caused “very negative consequences” had the U.S. faced default. Echoing the president’s remarks earlier Monday, Sperling urged the need for bipartisanship in the debt reduction deal later this year.
“We don’t agree that [S&P's] political analysis and certainly their flawed economic and budget analysis justify the downgrade in any way,” Sperling said. “But we don’t disagree with what is a very obvious point too … that we need to be able to overcome the degree of line drawing, the degree of my-way-or-the-highway that is keeping us as a country, as a government, from coming together on the type of bipartisan agreement we need right now to get our deficit down and on the right path.”
S&P continued to stand by its decision to downgrade the nation from an AAA credit rating to AA+, saying it based its decision on the nasty political fight between the Obama administration and Congress over raising the debt ceiling.
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