. >> shepard: of course, our sources indicate and i know yours as well, that s&p, standard and poor's and moody's who do the rating don't like either of these bills because they don't cut enough. so chances are. the credit ralgt is going to be slashed no matter what happens now. >> you are absolutely right. the experts out there are predicting right now the probability is 50% that we're going to see some sort of downgrade on our pristine debt rating if and when that does happen, expect a swift and immediate reaction. you are not going to be able to go grab a cup of coffee before we see any move in the market. expect a drop in stocks. expect a drop in bonds. on the flip side. we're going to see interest rates rise. that means everything from the cost of your mortgage to maybe even your credit card bills could go up. also, going up, the price of oil as well as gold. basically the value of the portfolio is going to do down but the cost for you live in your house or car going to go up. either scenario. >> shepard: shibani joshi, thank you. lawmakers in the house still trying to bide some time to roun

the rating agencies, the big three are s&p, standard & poor's, and moody's and touch, and then they give a debt that affects the borrow wur's ability to pay back the underlying loans. the safest debts are aaa rated. it's been that way for the u.s. debt since 1917 when moody's assigned that aaa rating to the u.s. 18 other countries as well have the aaa ratings. why do these credit rating agencies matter? well, investors around the world listen to them and listen carefully. they look at them to judge where they will get the best return on their investment. for governments the ratings agencies have power over the interest rates they can send in bonds to investors. if you are a government like the u.s. trying to raise money you want to pay the lowest amount of interest to borrow that money. so who pays the agencies? agencies are paid by the borrow wur, or from subscribers that received the ratings and want to know how their potential investments can fair, and standard & poor's tells cnn the sovereign u.s. debt rating is unsolicited it, and the u.s. does not pay for its rating. christine roma

standard and poor's or moody's. they have been clear since really the beginning of the year saying if a long-term deal is not agreed to, s&p says if this does not lead to $4 trillion in cuts, it will lead to a negative outlook on the credit rating or a downgrade. if we downgrade from aaa which is the highest grade you can get to aa, estimates show it could mean 1 million jobs lost in the american economy. >> jonathan, thanks. great piece in the post. >>> can the american dream be saved? tea partiers are fighting for their version, but there is a better way forward for all americans. >>> sad news about the u.s. ski champion jarrett peterson called 911 before shooting himself in a car monday night in a car. peterson suffered from depression and alcoholism. he was probably remembered for his signature jump called the hurricane involving twists and turns while 50 feet in the air. he won a silver medal in the 2010 vancouver olympics. >>> the georgia mother spared jail time in the death of her 4-year-old son. killed by a hit-and-run driver while they were jay walking. she was given the option of a new trial or 40 hours of comm

the prior ratings of all, triple-a and non-investment grade munis by moody's standards were 97% times less likely to default than corporate bonds yet were rated lower. by s&p standards they were 45 times less likely to default. have you changed your ways? are you now rating governmental agencies as if they were corporations on one thing based on one thing adam one thing which is the risk of default? >> we have always only had one consistent scale we've tried to adopt across all classes, and as a result, you will see our municipal ratings are generally higher than other types of substitutions. -- types of institutions. and we have made attempts to whether it's financial stuthses or whether it's in the u.s. or europe. so we are striving to get come practice billity across all classes and -- >> the reason i ask is because in 2008. i know it's changed a little bit. but my guess is -- let me ask you this, are you aware that munis have defaulted at a higher rate than corporate bonds? >> well, as i mentioned, we are aiming to get comparable ratings across all asset classes. >> that means it would be rated at a bb or ba to a triple-a. i would argue that since de

s&p, we heard from moody's. now they say they want $4 million in cuts. >> they are repeating what standard & poors said about a week ago. unless you cut $4 trillion. and those $4 trillion of cuts are pwhraoefbg. you're going to get a download. that is the loss of our financial reputation to put it in layman's terms. a downgrade looks much more likely. for two reasons, we are not going to get $4 trillion worth of cuts before this deadline, that is just not going to happen. number two, i don't think we can convince the rating agencies that we can really get a handle and our entitlement programs. that is not going to happen. those two factors, bear that in mind, a downgrade looks increasingly likely. i'd say probable. martha: wall street is looking at this back and forth on these numbers and say are saying, so what, you guys can kick the can down the road which looks like what is going to happen chris stirewalt but we're not crazy about the balance sheets of america any more and we'll let everybody knows it. what happens with that? >> reporter: in the perverse logic of washington this announcement from s&p and goldman actuals lee makes a small deal more

rating categories, all of them, aaa and the non-investment grade, muni by moody's standards were 97% times less likely to default than corporate bond. yet were rated lower. by s&p standards a were 45 times less likely to default, yet rated lower. have you changed your ways? are you now reading municipal and other government agencies as if they were corporations? based on one thing in on one thing which is the risk of default. mr. sharma. >> ranking member, we have always had one scale, consistent scale that we've tried to adopt across all our asset classes. and as result you have seen our municipal rates are generally higher than corporate and other types of institutions, financial institutions. and we have made vigorous attempt to really make our ratings very comparable, whether it is munis or carpet over the financial institutions, whether it's in u.s. or in europe. so we are striving to get comparability of our ratings across all asset classes, across all geographies. >> the reason i ask him in 2008, again, not updated but i know it is change a bit, my guess is, let me ask a basic question. are you aware that munis had defaulted at any higher rates than co

standard and poor's and moody's. toward the end of the hearing, the panel was questions about the possible downgrading of the u.s. postal credit should be congress not -- u.s.'s credits should congress not pass a resolution on the debt ceiling. >> they looked at five areas. they look at the fiscal aspects, they look at the monetary, they look at the economic situation of the country, the liquidity and funding, and to the political institutions that fulminate the policy. >> i realize the five. analysis. one of the points of that analysis is what structural changes the congress is going to pass. would you be able to give an evaluation on the president's proposal and if that is inefficient? >> we have to have a credible plan to reduce the debt burden. >> i serve on the budget committee where they said, we do not evaluate speeches. was there something you were able to evaluate with regard to the administration as to whether their plan was credible? >> there has been a number of plans announced by the administration. we think some of the plans to reduce that level and could bring the u.s. debt burden and the deficit level into the range for a aaa rating. we have a