Reid: S&P downgrade backs Dems’ call for more revenue

Standard & Poor’s decision to downgrade the nation’s credit rating reinforces Democrats’ call for increasing tax revenue, Senate Majority Leader Harry Reid (D-Nev.) said Friday.

In a statement, Reid said:

The action by S&P reaffirms the need for a balanced approach to deficit reduction that combines spending cuts with revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners. This makes the work of the joint committee all the more important, and shows why leaders should appoint members who will approach the committee’s work with an open mind — instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S&P are demanding.

{mosads}The credit rating firm said the recent plan to raise the debt limit while reducing the debt “falls short” of its expectations, but S&P also offered broader condemnations of America’s political process.

“The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed,” the firm wrote in its announcement. “The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge.”

The Treasury Department immediately pushed back against the downgrade by S&P, accusing the rater of having major calculation errors that threw the firm’s entire rationale into doubt.

“A judgment flawed by a $2 trillion error speaks for itself,” said a Treasury spokesperson.

More news from The Hill:

♦ Boehner blames Democrats, says it’s a ‘wake-up call’

♦ Treasury: S&P’s move based on $2T error

♦ Pelosi: Pressure on supercommittee; must be transparent