NEW YORK CITY-Standard & Poor's has lowered the sovereign credit rating on the United States of America from its long held AAA status to AA+. According to a research update issued by the ratings agency, the downgrade--the first in the country's history--"reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."

The agency further noted that another downgrade to AA is on deck in the next two years if it doesn't see the decrease in spending agreed upon in the bill. As for the other ratings agencies, Fitch calls the bill a step in the right direction and is holding its rating, as is Moody's though with a negative outlook "should fiscal discipline wane."

To add insult to injury, S&P questioned the ability of a bickering Congress to handle the debt challenges we face like adults, though it didn't use quite those words: "The downgrade reflects our view that the effectiveness, stability and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.

"We have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy," the report continues, "which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon."

According to a New York Times report, White House officials see only a modest impact from the downgrade, other than "the embarrassing blow to the global financial standing of the United States." The report went on to say that a downgrade of government-backed institutions, such as Fannie Mae and Freddie Mac, could follow.

Fox News is reporting that the White House calls the downgrade "deeply flawed."