remember, all the inputs to rate CDO, RMBS were provided from banks
government thinks that it can make quick bucks by going after credit rating agencies, but it is missing the whole point.
in order for S&P, Moody, Fitch to rate CDO, RMBS, they evaluate the products using inputs from banks. of course, banks committed frauds (and paid $$$ to governments), but the situation with credit agencies are different.
it's like Ivy leagues accepting candidates based on the transcripts from high schools. now, those ones who got accepted dropped out of the school and it turned out that high schools lied about the gpas. question is, would ivy leagues are responsible?
government may argue that credit rating agencies should have not allowing banks to create several layers of tranches (of CDOs for example), but that's like asking them not to evaluate any B- companies' capital structures.