[Congressional Record (Bound Edition), Volume 154 (2008), Part 3]
[House]
[Page 3406]
[From the U.S. Government Publishing Office, www.gpo.gov]




           THE SAFE COMMISSION ACT: A BIPARTISAN WAY FORWARD

  (Mr. WOLF asked and was given permission to address the House for 1 
minute and to revise and extend his remarks.)
  Mr. WOLF. Mr. Speaker, in January, Moody's Investors Service released 
its annual report which concluded that the United States triple-A bond 
rating is at risk.
  We should care that respectable credit rating agencies are projecting 
that the United States will be on par with Estonia by the year 2015, 
Poland and Mexico by 2020, and below investment grade, junk debt, by 
2025.
  Our Nation cannot continue on its current financial path. The Cooper-
Wolf SAFE Commission Act would put everything on the table, tax policy, 
entitlements, and other Federal programs, to provide a bipartisan way 
forward on this issue. Over 70 Members from both sides of the aisle, 
Republican and Democrat, are already cosponsoring the bill.
  We must work together to rein in spending. We cannot continue to 
avoid a responsibility to future generations, to our children and our 
grandchildren, by passing on a broken system in the form of unfunded 
Social Security and Medicare obligations and unsustainable spending.

               [From the Financial Times, Jan. 11, 2008]

              U.S.'s Triple-A Credit Rating `Under Threat'

       (By Francesco Guerrera, Aline van Duyn and Daniel Pimlott)

       The U.S. is at risk of losing its top-notch triple-A credit 
     rating within a decade unless it takes radical action to curb 
     soaring healthcare and social security spending, Moody's, the 
     credit rating agency, said yesterday.
       The warning over the future of the triple-A rating--granted 
     to U.S. Government debt since it was first assessed in 1917--
     reflects growing concerns over the country's ability to 
     retain its financial and economic supremacy.
       It could also put further pressure on candidates from both 
     the Republican and Democratic parties to sharpen their focus 
     on healthcare and pensions in the run-up to November's 
     presidential election.
       Most analysts expect future administrations to deal with 
     the costs of healthcare and social security and there is no 
     reflection of any long-term concern about the U.S.'s 
     financial health in the value of its debt.
       But Moody's warning comes at a time when U.S. confidence in 
     its economic prowess has been challenged by the rising threat 
     of a recession, a weak dollar and the credit crunch.
       In its annual report on the U.S., Moody's signalled 
     increased concern that rapid rises in Medicare and Medicaid--
     the government-funded healthcare programmes for the old and 
     the poor--would ``cause major fiscal pressures'' in years to 
     come.
       Unlike Moody's previous assessment of US government debt in 
     2005, yesterday's report specifically links rises in 
     healthcare and social security spending to the credit rating.
       ``The combination of the medical programmes and social 
     security is the most important threat to the triple-A rating 
     over the long term,'' it said.
       Steven Hess, Moody's lead analyst for the U.S., told the 
     Financial Times that in order to protect the country's top 
     rating, future administrations would have to rein in 
     healthcare and social security costs.
       ``If no policy changes are made, in 10 years from now we 
     would have to look very seriously at whether the U.S. is 
     still a triple-A credit,'' he said.
       Mr. Hess said any downgrade in the U.S. rating would have 
     serious consequences for the global economy. ``The U.S. 
     rating is the anchor of the world's financial system. If you 
     have a downgrade, you have a problem,'' he said.
       Moody's did once threaten to cut the rating of some of the 
     U.S. Treasury's debt when Congress refused to pass the 
     president's budget in the mid-1990s. Other large economies, 
     notably Japan in the 1990s, have had to suffer the symbolic 
     blow of losing their top-notch credit rating.
       Last year, David Walker, comptroller general of the U.S., 
     caused controversy when he compared America's current 
     situation with the dying days of the Roman empire and warned 
     the country was on ``a burning platform'' of unsustainable 
     policies.
       Medicare and Medicaid spending, which has risen sharply 
     over the past few decades and now accounts for about 45 per 
     cent of total federal spending, up from about 25 per cent in 
     1975, has long been a source of concern.
       Last month, Peter Orszag, director of the Congressional 
     Budget Office, which advises Congress on the federal budget, 
     said the issue was ``the central fiscal challenge'' facing 
     the US.
       Most presidential candidates have vowed to reform the 
     healthcare system but many of them, especially on the 
     Democratic side, have focused on extending coverage to the 
     40m-plus uninsured Americans rather than on cutting costs.

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