International rating agency Standard & Poor's downgrades US's credit rating

Republicans and Democrats quickly doled out blame to each other for the first-ever downgrade in the nation's sterling credit rating, an expected but unsettling move that further clouds prospects for the recovery of the fragile U.S. economy, Associated Press reports.

The back and forth came after Standard & Poor's, one of the world's three major credit rating agencies, cited "difficulties in bridging the gulf between political parties" as a major reason for the downgrade from U.S.'s top shelf AAA status to AA+, the next level down. The rating agency has essentially lost faith in Washington's ability to work together to address its debt.

The downgrade, hours after markets closed on Friday, is a first for the United States since it was granted an AAA rating in 1917. S&P warned about a downgrade as far back as April. Its decision came just four days after fractious debate over raising the nation's debt ceiling ended in a compromise that would reduce the country's debt by more than $2 trillion. S&P said Friday the cuts did not go far enough.

House Speaker John Boehner, R-Ohio, said he hoped the downgrade served as a wake-up call to the Democratic Party.

Senate Majority Leader Harry Reid, D-Nev., while not calling out Republicans by name, said S&P's action showed that Democrats preferred policy approach - a mix of raising taxes and budget cuts - was the correct way to move forward.

At least one senator, Republican Mark Kirk of Illinois, called for the president to bring Congress back from its August recess to try and address the issues raised by S&P's report.

The White House remained mum on the downgrade early Saturday. President Barack Obama met with Treasury Secretary Timothy Geithner in the Oval Office late Friday afternoon before leaving for a weekend at Camp David.

Regulators and the Federal Reserve issued a statement designed to calm investors, saying that the downgrade shouldn't impact U.S.-guaranteed investments. The statement sought to ensure that banks understood the downgrade would not affect the amount of money that regulators require banks to hold onto against possible losses.

If this week is any indication, S&P's decision is unlikely to have an impact on how the United States finances its borrowing, through the sale of government-backed bonds, bills and notes.

"Investors have voted and are saying the U.S. is going to pay them," said Mark Zandi, chief economist of Moody's Analytics. "U.S. Treasurys are still the gold standard."