Two government officials tell ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of U.S. debt from its current AAA value.
Official reasons given, one official says, will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited. The official was unsure if the bond rating would be AA+ or AA.
A third official says that S&P made a "serious mistake" in its analysis, "based on flawed math and assumptions," so the Obama administration is pushing back. But even though "S&P has acknowledged its numbers are wrong, it's unclear what they're going to do.," the official said.
S&P's numbers were off by "roughly $2 trillion," the official said.
S&P refused to comment.
Because of the pushback, the Obama administration is preparing for the downgrade but is not 100% positive it’s going to happen, officials said. And if the downgrade does happen, officials are not sure when it will happen.
Before ratings agencies issue a downgrade, there is often some back and forth that goes on behind the scenes. Treasury Department officials have been making the case for months that S&P should not downgrade US debt.
-Jake Tapper ( @jaketapper )
*This post has been repeatedly updated with breaking news.