The US Treasury and the White House launched an unprecedented attack on the "credibility and integrity" of Standard & Poor's for its decision to downgrade the US's credit rating, blasting the agency's "misleading" calculations and its "breathtaking" refusal to change its mind.
The furious assault, in a memo posted on the Treasury website by a senior official, came just hours after S&P had stripped the US of its coveted AAA credit rating, blaming political deadlock in Washington.
Defending his company's decision, S&P's president Deven Sharma said the US government's angry response was "the same you would get from any other country or company".
The White House and the Treasury both accused S&P of switching its justification for the downgrade after Treasury officials pointed out a $2.1tn mistake in S&P's calculations, which should have been enough see the US retain AAA status.
"After Treasury pointed out this error – a basic math error of significant consequence – S&P still chose to proceed with their flawed judgment by simply changing their principal rationale for their credit rating decision from an economic one to a political one," wrote John Bellows, the Treasury's assistant secretary for economic policy.
Gene Sperling, head of the White House Council of Economic Advisers, joined in the attack on S&P, in a statement:
The magnitude of their error combined with their willingness to simply change on the spot their lead rationale in their press release once the error was pointed out was breathtaking. It smacked of an institution starting with a conclusion and shaping any arguments to fit it.
Bellows said that S&P acknowledged the $2.1tn mistake. "Nonetheless, S&P did not believe a mistake of this magnitude was significant enough to warrant reconsidering their judgment," wrote Bellows, continuing:
The magnitude of this mistake – and the haste with which S&P changed its principal rationale for action when presented with this error – raise fundamental questions about the credibility and integrity of S&P's ratings action.
In response, S&P held a conference call with journalists on Saturday, as well as sending senior executives out to do the rounds of the media in an attempt to put its side of the story.
Sharma defended S&P's role, telling the Wall Street Journal: "We are supposed to be objective, and others are always trying to convince us why the risk is less than we think it is."
The ratings agency said that the political deadlock in Congress was legitimate grounds for lowering the US sovereign credit rating to AA+.
David Beers, global head of sovereign ratings at S&P, said that the agency's key consideration was "the difficulty in framing a political consensus" around tackling the deficit. "Fiscal policy, like other government policy, is fundamentally a political process," he said.
The ratings agency was unhappy with the deal that Congress agreed last week, and is sceptical that the government will do better in the future.
"This agreement will not produce a stabilisation of the government's debt burden on its own. We don't have a lot of confidence that another agreement is going to follow this one," Beers said.
It placed blame for the downgrade on the last-minute haggling in Congress over budget cuts – implying that a swift increase in the debt ceiling would have avoided Friday's downgrade.
"The debacle over the debt ceiling continued until almost the midnight hour," said John Chambers, chair of S&P's sovereign ratings committee.
Among those unconvinced by S&P's explanation was Warren Buffett, the Omaha-based billionaire investor who also holds a stake in Moody's, S&P's main rival.
In a television interview, Buffett said the downgrade "doesn't make sense."
"In Omaha, the US is still triple-A. In fact, if there were a quadruple-A rating, I'd give the US that."
Buffett's investment firm Berkshire Hathaway holds about $40bn in US Treasuries, and he said that S&P's move "doesn't tempt me to sell."
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