In an interview, Levin said he views those faults as conflicts of interest issues that are separate from the S&P's sovereign ratings work, which he declined to criticize. "My gut tells me that they're calling it as they see it and, hopefully, they're not impacted by their previous failures to call them as they should have seen it," Levin said.
Senate Majority Leader Harry Reid, a Nevada Democrat, took a different view. "I wish they had made a few demands when Wall Street was collapsing," said Reid. "They were silent then. Maybe they're trying to get more energized."
July Warning
At issue is a warning the company issued July 14 that there is a 50 percent chance S&P would downgrade the government's credit rating within three months if lawmakers didn't approve a "credible" deficit reduction package as part of a plan to raise the debt cap.
It was the latest in a series of demands from the company over the past year. In April, S&P said there was a one-in-three chance it would downgrade the government within two years; in October, it said lawmakers had as many as five years to address long-term deficits.
In its July report, the company said, "We believe that an inability to reach an agreement now could indicate that an agreement will not be reached for several more years."
Critics say the company is misreading the political dynamics in Washington and that it shouldn't engage in political prognosticating at all.
"If we fail to increase the debt ceiling, they have every right to take the U.S. down as many notches as they want," said Jared Bernstein, former economic advisor to Vice President Joe Biden. "I don't look to S&P for political analysis" and "their job is not to try to do political crystal-ball gazing. Their job is to assess the reliability of U.S. debt."
U.S. Can Meet Obligations
Bernstein said, "Nothing fundamental has changed in the ability of the U.S. government to fully meet its debt obligations."