A Year After Downgrade, S&P's View on Washington Unchanged
Democrats have floated letting Bush's tax cuts expire as scheduled. That would push taxes back to where they were under President Clinton and let Democrats trim levies on middle-class families from there, and maybe add short-term stimulus spending.
That's irresponsible, says Sen. Pat Toomey, R-Pa.
Maryland Rep. Chris Van Hollen, ranking Democrat on the House Budget Committee, says Republicans have been reckless for insisting on even more top-bracket tax cuts.
"We have put concrete ideas on the table that will solve the problem," said Toomey. He said supercommittee Republicans were willing to support new revenue, mostly from asset sales and limiting itemized deductions, in exchange for spending cuts and a 20 percent cut in top tax rates.
"The political dysfunction remains," Van Hollen says. "You have a refusal of congressional Republicans to support a balanced approach to reducing the deficit."
Democrats offered $6 of spending cuts per dollar in tax hikes, Van Hollen says. That's more than called for in the Simpson-Bowles deficit-reduction plan and would allow short-term spending to stimulate the economy, he says.
S&P is still bearish on politicians. Chambers won't discuss either side's proposals, except to rebut Toomey by saying "there's no credible scenario where we grow our way out of this."
On June 8, S&P issued another warning: There's a 1-in-3 chance it will cut the U.S. rating again by 2014.
This story first appeared in USA Today.