I recently heard someone say the following:

It's cats and dogs out there!

As in "it's raining cats and dogs out there." I then thought that person should have said

Those are cats and dogs out there!

because the phrase refers to multiple objects. My hobbyist-linguist friend then said to me that the person was correct because cats and dogs were a compound subject - a result of the idiom itself. I'm inclined to believe my friend, but I'm not sure. I think I may have initially been confused because of the diversion from the format of use of the idiom.

Which is correct?