They said the assumed the 2003 tax cuts would be extended because the GOP wouldn't raise taxes this times. The tax extensions can be stopped by either the democratically controlled senate or the president. They can do it without endangering the debt the ceiling limit. The S&P didn't spell it out but they assume the dems won't have the balls to do it since it might mean they have to end all the tax cuts.

Here is another sentence "Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. " So we see here that the S&P has two problems, they don't have faith that the spending cuts will actually happen and they think the deficit will continue to grow. Sorry but that isn't an endorsement for raising taxes it is a statement that like many tea party members have been claiming it didn't cut the deficit enough.

Finally there is this sentence "Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing." So maybe we should look at that straight forward sentence instead of trying to get some spin out a sentence taken of context.