A day after Standard & Poor's took the unprecedented step of downgrading the creditworthiness of the U.S. government, the ratings agency offered a full-throated defense of its decision, calling the bitter standoff between President Barack Obama and Congress over raising the debt ceiling a "debacle," and warning that further downgrades may lie ahead.

In an unusual Saturday conference call with reporters, senior S&P officials insisted the ratings firm hadn't overstepped its bounds by focusing on the political paralysis in Washington as much as fiscal policy in determining the new rating. "The debacle over the debt ceiling continued until almost the midnight hour," said John B. Chambers, chairman of S&P's sovereign ratings committee.

Another S&P official, David Beers, added that "fiscal policy, like other government policy, is fundamentally a political process."

Administration officials at the White House and Treasury angrily criticized S&P's action as based on faulty budget accounting that discounted the just-enacted deal for increasing the debt limit.

The agreement set spending caps in the fiscal year that begins Oct. 1 and calls for a bipartisan congressional "super committee" to propose more deficit reduction -- for up to $2.5 trillion in combined savings over a decade.

"The bipartisan compromise on deficit reduction was an important step in the right direction," the White House press secretary, Jay

Carney, said in a statement Saturday. "Yet, the path to getting there took too long and was at times too divisive. We must do better to make clear our nation's will, capacity and commitment to work together to tackle our major fiscal and economic challenges."

The ratings agency put additional pressure on the joint congressional committee to find additional spending cuts, tax hikes or both to bring down the inexorably rising national debt.

China, the largest foreign holder of U.S. debt, said Saturday that Washington needed to "cure its addiction to debts" and "live within its means," just hours after the S&P downgrade.

While Europeans had girded for a possible downgrade, the news that S&P had actually yanked the United States' AAA rating was nonetheless received with a degree of alarm in the corridors of power across the continent. Finance Minister Francois Baroin of France questioned the move Saturday, noting that the figures used by S&P didn't match those of the Treasury and overstated the federal debt by about $2 trillion.

Baroin said he found it curious that neither Moody's nor Fitch, the two other major ratings agencies, had reached a similar conclusion. Moody's has said it was keeping its AAA rating on the nation's debt but that it might still lower it.

"We have total confidence in the solidity of the American economy," Baroin said in an interview on French radio. Nonetheless, he added, the decision confirms that the world's most developed economies are confronted with the same urgent priorities: to lift growth and reduce public and private debt.

The lowering of a core financial instrument of the global economy is freighted with symbolic significance, but carries few clear financial implications. The downgrade could lead investors to demand higher interest rates from the federal government and other borrowers, raising costs for local governments, businesses and homebuyer. But many analysts say the impact could be modest, in part because the other ratings agencies, Moody's and Fitch, have not downgraded the government at this time.

The wrangling over the downgrade to AA+ from AAA stretched over days. S&P executives came to the Treasury Department earlier in the week to meet with a group of administration officials led by Mary Miller, the assistant secretary for financial markets, who is one of the government's main liaisons to the rating agencies, according to a government official with knowledge of the meeting.

Rumors of a potential downgrade started swirling through the financial markets on Friday morning, causing stocks to fall sharply. Although Moody's and Fitch had affirmed the government's AAA rating late Tuesday afternoon, S&P was silent.

But around 1:30 p.m. Friday, S&P sent a memorandum outlining its preliminary position, including specific figures underscoring their argument for a downgrade. Treasury officials were told that S&P planned to make its announcement after 4 p.m., when the stock market closes, according to two administration officials.