WASHINGTON (AP) -- Credit rating agency Standard & Poor's says it has downgraded the United States' credit rating for the first time in the history of the ratings.
The credit rating agency says that it is cutting the country's top AAA rating by one notch to AA+.
The credit agency said late Friday that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country's debt situation.
A source familiar with the discussion said that the Obama administration believes S&P's analysis contained "deep and fundamental flaws."
S&P says in addition to the downgrade, it's issuing a negative outlook, meaning there's a chance it will lower the rating further within the next two years. It says such a downgrade to AA would occur if the agency sees less reductions in spending than Congress and the Administration have agreed to make, higher interest rates, or new fiscal pressures during this period.
S&P says it has changed its view "of the difficulties of bridging the gulf between the political parties" over a credible deficit reduction plan.
(Copyright 2011 by the Associated Press. All rights reserved.)