Congress Panel Probing S&P Downgrade

The U.S. Senate Banking committee has begun looking into last week's decision by Standard and Poor's to downgrade the U.S. credit rating, a committee aide told Reuters Monday.

The aide said the panel was gathering information about the S&P move but no decision had been made on whether it will hold hearings into the downgrade.

The aide said an official investigation has not been launched but all options were being weighed.

Late on Friday, S&P said the world's largest economy no longer deserved the top AAA credit rating, cutting it one notch to AA-plus.

The move was driven by concerns over Washington's inability to achieve at least $4 trillion in long-term savings amid a national debt that has climbed above $14.3 trillion.

Instead, after a rancorous fight between Democrats and Republicans, Congress and President Barack Obama recently negotiated a 10-year deficit-reduction plan that could end up saving a little over $2 trillion.

Senate Banking Committee Chairman Tim Johnson, in a statement, called S&P's downgrade an "irresponsible move" that could have a far-reaching impact.

The Democrat said the downgrade may "have spillover effects that tax the American people by increasing interest rates on home loans, credit cards, and car loans, and by increasing the cost of finance for some state and local governments."