No second thougts on U.S. downgrade: S&P managing director David Beers

NEW YORK – A managing director at Standard & Poor’s said Monday that he has absolutely no second thoughts about the credit ratings agency’s decision to cut the U.S. debt rating.

With global stocks sinking early in the day, S&P’s David Beers said on ABC television that the agency’s decision was based on several factors, including damage done to the U.S. reputation over the controversy surrounding the debt ceiling and concerns that underlying public finances are on an unsustainable path.

Asked if he had any second thoughts about the downgrade, Beers said “absolutely not.”

While much has been made about the Treasury Department’s claim that S&P acted on an analysis that had a $2-trillion error, Beers rebuffed the notion during an appearance on CNN.

“This idea that we made a $2 trillion error is simply a smoke screen for the unhappiness about our decision,” he said.

Beers did seem to try to alleviate concern about the downgrade, saying it was “a very small diminution, if you like, in the credit standing of the United States.”

“This is not a catastrophic decline in the U.S.’s credit-worthiness,” he added.

S&P downgraded the U.S. rating for the first time Friday, cutting the rating to “AA+” from AAA. Two other ratings agencies — Moody’s and Fitch — are for now keeping the AAA rating for U.S. debt.

Beer said the U.S. can regain its top rating with S&P, “if we see that the climate in Washington becomes easier for the parties to come together on…fiscal policy” and “a more robust and bigger fiscal stabilization program emerges in the future.”