WASHINGTON DC, United States — KEY American politicians have only hardened their partisan positions in the face of an embarrassing and unprecedented downgrade of US credit worthiness, a move one of the financial world’s top rating agencies blamed on Washington’s dysfunctional, polarised government.

Even President Barack Obama, who tried to lower the partisan rancour during a debilitating debate over raising the cap on US borrowing that preceded the credit downgrade, blasted conservative Republicans on Monday for “drawing lines in the sand”.

Without naming the opposition party or its small-government, low-tax tea party wing, Obama blamed the downgrade on a “lack of political will in Washington … refusal to put what’s best for the country ahead of self-interest or ideology”.

The Standard & Poor’s announcement late Friday that it was lowering the US credit rating from AAA to AA+, a one-notch downgrade, further rattled global markets that were already in the midst of a more-than weeklong decline.

As Obama spoke in the White House, some television networks simultaneously showed a stock ticker as the Dow Jones average plummeted toward a huge 5.5 per cent decline in share prices. Stocks have already erased their gains for the year as the debt and spending fight dragged on, the US economy slowed from an already modest recovery and unemployment stood above nine per cent.

In announcing the rating downgrade, David Beers, global head of sovereign ratings at S&P, said the agency was concerned about the “degree of uncertainty around the political policy process. The nature of the debate and the difficulty in framing a political consensus … that was the key consideration”.

Politicians, in the immediate aftermath, proved his assessment correct. Most outspoken were Republicans. Democrats, while some joined the partisan fray, tended to blame S&P for faulty decision-making:

Some examples:

* Minnesota Congresswoman and Republican presidential hopeful Michele Bachmann: “President Obama is destroying the foundations of the US economy one beam at a time. I call on the president to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan with a list of cuts to balance the budget this year, turn our economy around and put Americans back to work.”

Geithner, who had been widely expected to leave the administration soon, announced two days ago he was staying on through the 2012 election.

On the other side of the political divide:

* Geithner: “They’ve (S&P) handled themselves very poorly. And they’ve shown a stunning lack of knowledge about the basic US fiscal budget math.”

* Sen John Kerry, the Democratic nominee for president in 2004, said the move was a “tea party downgrade”.

* Democratic Rep Democrat George Miller, vented his anger at what he called the Republicans’ “reckless extortionist legislative strategy”.

S&P’s standing in the financial world has been damaged by the agency having left mortgage-backed securities with a top AAA rating even as their collapse caused the near meltdown of the US economy in late 2008.

The agency acted, nevertheless, three days after Congress approved and Obama signed an extension of America’s US$14.3-trillion debt limit after a blisteringly partisan legislative fight. The end result was a US$1.2-trillion cut in US spending over the coming decade, with promises of more than US$2 trillion more by year’s end. Obama and the Democrats, in the face of tea party-fuelled Republican intransigence in the House of Representatives, failed to win an increase tax revenues.

S&P noted in its downgrade that the absence of increased taxes made it less likely that the US could take decisive action to diminish it’s spiralling deficits.

Despite the furor over the S&P downgrade, a political battle that was only heightened in the aftermath of the debt ceiling fight, the price of US Treasury bonds — that might have taken a hit because of the credit decline — went up as investors were willing to buy the securities for even lower rates of return.