Standard & Poor's downgraded the U.S. credit rating from triple-A late Friday to double-A-plus. Congress rushed last week to raise the debt ceiling at the last moment, but while default was avoided, S&P said the political turmoil and the public debt burden on the country prompted the downgrade. The downgrade could mean more expensive future borrowing for both the U.S. government and consumers on products such as credit cards and mortgages. Both Moody's Investors Service and Fitch Ratings affirmed their highest ratings this week, though Moody's recently assigned a negative outlook to the triple-A rating first given to the U.S. in 1917. "We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process," S&P said. The rating agency said the debt ceiling plan fell short of the mark its analysts believed was necessary to stabilize the U.S. debt levels. However, when S&P submitted its findings to the Obama administration Friday, Treasury officials found a $2 trillion error in the deficit calculations. S&P went ahead with the downgrade anyway. "A judgment flawed by a $2 trillion error speaks for itself," a Treasury spokesman said. The plan signed by President Obama Tuesday would allow an initial increase to the debt limit by $400 billion and provide two more steps needed for raising the ceiling by between $2.1 trillion and $2.4 trillion, according to the Congressional Budget Office. The bill would cut an initial $917 billion in government spending between 2012 and 2021 and establishes a special committee to seek at least $1.5 trillion in additional savings over the next 10 years. If Congress does not approve the committee's proposal, automatic triggers would slash $1.2 trillion in spending. But S&P said the plan didn't go far enough. Even if the minimum $2.1 trillion in spending cuts are made, analysts project government debt to rise from 74% GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Analysts also assumed the Bush tax cuts to remain in place after 2012 as House Republicans resist raising revenues. They added U.S. debt levels are beginning to diverge from its peers Germany, the U.K., France and Canada and heading higher. Banking regulators put out guidance to its institutions Friday, assuring them the weighted risk of Treasury securities and others issued by the government or government-sponsored entities, such as Fannie Mae and Freddie Mac would be unaffected by the downgrade. Skeptics surfaced Friday night, pointing out the S&P miscalculation of the U.S. fiscal situation. Throughout the week, lawmakers questioned the rating agencies' ability to gauge the creditworthiness of sovereign debt given their lack of foresight before the mortgage meltdown. "In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right," Economist Paul Krugman wrote for the New York Times Friday. Capital Economics said late Friday that the downgrade will likely rattle already volatile financial markets on Monday. "But any spike in Treasury yields and/or fall in the dollar should be relatively short-lived," CE said. "Once the dust settles, attention will turn back to the economic fundamentals, which are certainly consistent with low Treasury yields." Still, S&P placed the outlook on the long-term rating of the U.S. debt at negative. Even if the select Congressional committee reduces the deficit at the minimum level, which may include raising revenues, the long-term rating may only stabilize at double-A-plus, S&P said. "The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy," S&P said. Write to Jon Prior. Follow him on Twitter @JonAPrior.