The Republican leadership in the US Congress on Monday ruled out budging under pressure to increase taxes in the aftermath of last week's decision of Standards & Poor's to downgrade America's credit rating from AAA to AA+.
"Over the next several months, there will be tremendous pressure on Congress to prove that S&P's analysis of the inability of the political parties to bridge our differences is wrong," said the House Majority Leader, Eric Cantor.
"In short, there will be pressure to compromise on tax increases. We will be told that there is no other way forward. I respectfully disagree," he said.
Soon after, US President Barack Obama in a statement made a passionate appeal to both Democrats and Republicans to work together to resolve the political impasse over economic issues, which was one of the key reasons for S&P's decision.
"The President remains opposed to any structural reforms and would only nibble around the edges of these programmes if taxes are increased on job creators," Cantor wrote in a memo to his Republican colleagues in the House of Representatives.
"Given that reality, I firmly believe that these are issues that will be central to the decision that voters will make in the 2012 election," Cantor said.
"As we have said from the beginning of the year, the new Republican majority was elected to change the way Washington does business. We were not elected to raise taxes or take more money out of the pockets of hard-working families and business people.
"People understand Washington can't keep spending money that it doesn't have. They want to see less government -- not more taxes," he said.
"This means that spending must be reduced from its current level of 24 per cent of the GDP. This is why we were elected and we are doing the things that we promised we would do. Since we only control one-half of one-third of Washington, these changes are happening incrementally, but make no mistake, they are happening. And that is a sign of progress," Cantor argued.
Cantor said anyone who has looked at the numbers cannot seriously discount S&P's concerns over the US government's rising public debt burden.
"I do, however, believe its analysis is overly focused on resolving the debt crisis in a manner that would greatly worsen the jobs crisis, which would be a catastrophic mistake," he said.
"This is not surprising, as S&P's job is to opine on the federal government's balance sheet. Indeed, S&P makes clear in its Friday report that it takes, 'no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the US's finances on a sustainable footing," the memo said.
"S&P seems particularly focused on what it sees as the inability of the political parties to bridge our differences on the best way to eliminate the deficit. By this it means, in part, our unwillingness to raise taxes," Cantor said.