BUSINESS

U.S. debt downgraded by rating agency S&P

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"It is my hope this wake-up call will convince Washington Democrats that they can no longer afford to tinker around the edges of our long-term debt problem," Boehner said in a statement. "As S&P noted, reforming and preserving our entitlement programs is the 'key to long-term fiscal sustainability."

Traders have worked through a tumultous week, ending with the first credit downgrade in U.S. history. (Photo: Associated Press)

Senate Majority Leader Harry Reid, D-Nev., while not calling out Republicans by name, said S&P's action showed that Democrats preferred policy approach — a mix of raising taxes and budget cuts — was the correct way to move forward.

"The action by S&P reaffirms the need for a balanced approach to deficit reduction that combines spending cuts with revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners," Reid said.

At least one senator, Republican Mark Kirk of Illinois, called for the president to bring Congress back from its August recess to try and address the issues raised by S&P's report.

The White House remained mum on the downgrade early Saturday. President Barack Obama met with Treasury Secretary Timothy Geithner in the Oval Office late Friday afternoon before leaving for a weekend at Camp David.

S&P's decision, though, clearly angered the Obama administration.

Officials at the Treasury Department fought the downgrade until virtually the last minute. Administration sources familiar with discussions said the S&P analysis was fundamentally flawed. They spoke on condition of anonymity because they weren't authorized to discuss the matter publicly.

S&P had sent the administration a draft document in the early afternoon Friday and the administration, after examining the numbers, challenged the analysis.

In a statement, Treasury said, "A judgment flawed by a $2 trillion error speaks for itself."

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