S&P downgrade puts pressure on 'super committee' to fix entitlements

News outlets connected Friday's Standard & Poor's downgrade of the country's credit rating to AA+, instead of AAA, to the partisan debt deal. 

The Associated Press: "S&P sees the [debt] agreement as falling short of what's necessary to fix the nation's finances. The spending cuts Democrats and Republicans agreed on were relatively modest" (Gogoi, 8/6).

The Wall Street Journal: "Friday's downgrade of U.S. government debt raises pressure on a special 'super committee' that lawmakers formed this week to try—once again—to reach a far-reaching budget deal. ... In the wake of the budget deal's approval this week, some budget experts and even lawmakers initially suggested the special committee was destined for partisan deadlock too. ... Already, some names being floated for the super committee this week suggest that a bipartisan compromise, one that could combine savings from big entitlement programs such as Medicare with a tax overhaul, is possible" (McKinnon, Hughes and Crittenden, 8/6).

The Fiscal Times: "The S& P statement berated Congress and the White House for engaging in reckless political brinksmanship that undermined the financial community's confidence. ... Even before S&P rattled the political establishment and the financial community with its critique of the government's failure to adequately address its debt problems, there was concern that the creation of the new bipartisan 'super committee' to try to take on major entitlement and tax reforms in a matter of months was once again a case of Obama and Republican and Democratic leaders kicking the can down the road" (DePaul and Pianin, 8/6).

The Washington Post: "[O]fficials also said the downgrade supported Obama's call for a 'grand bargain' to cut the nation's debt through a combination of tax increases and an overhaul of entitlement programs such as Social Security and Medicare. ... Others in Washington used the downgrade as a political weapon, which bodes ill for a congressional 'supercommittee' that is supposed to agree on at least $1.2 trillion in budget savings by Thanksgiving to supplement the nearly $1 trillion in cuts that lawmakers already agreed to. In its report, S&P expressed doubt that the panel would be successful" (Goldfarb, 8/6).

Politico: "Said Sen. Chris Coons (D-Del.): 'By refusing to negotiate in good faith, Republicans turned the debt ceiling debate into a hostage crisis and last night we saw its first casualty.' ... 'Now we must fight to ensure that the cuts promised in the debt limit agreement actually happen, and that Congress takes the necessary next steps to reform our unsustainable entitlement programs and our inefficient tax code,' Sen. Rob Portman (R-Ohio), a former White House budget director under President George W. Bush, told POLITICO" (J. Allen, 8/6).

The Associated Press: "The big issues facing Obama and Congress: ... Congressional Democrats successfully opposed cuts to Medicare benefits, but lawmakers didn't completely shield the program. Although there will be no initial reductions, there would be an automatic 2 percent cut to providers if the new joint committee cannot agree on a new deficit reduction package. The joint committee can include Medicare changes in its package. Republicans have endorsed a plan that would transform Medicare into a voucher-like system for new retirees. Private insurance plans, not the government, would pay medical bills. Obama was willing to raise the eligibility age for Medicare from 65 to 67, and to increase co-pays and premiums, based on income, but only as part of a 'grand bargain' that included tax increases" (8/6).

Related from KHN: FAQ: Debt Deal 'Super' Committee's Impact On Health Spending Explained (Carey and Galewitz, 8/3).