"S&P sticks by its decision," said Chambers, the 56-year-old chairman of S&P's sovereign-debt rating committee. "Since the downgrade, our projection for the national debt as a percentage of the economy in five years has actually gotten worse."
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.
The downgrade teemed with frustration about
Congress' inability to contain the deficit. Even the $2.2 trillion
deficit-reduction deal Congress reached last year — about $1 trillion in
spending cuts over 10 years plus another $1.2 billion in automatic cuts
if the so-called supercommittee failed to recommend more deficit
reductions — wasn't enough, S&P wrote. It warned that even the 2012
election might not produce the political will needed to rein in
Medicare, Social Security and other entitlements.
"By
then the government debt burden will likely be higher, the needed
medium-term fiscal adjustment potentially greater," S&P said.
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