I would like to begin with Luther's stance on the necessity of the sacrament of Baptism. Notice that, in his own words, he does refer to it as a sacrament and as something that Christians must adhere to as necessary for salvation.
"In the first place, we must above all things know well the
words upon which Baptism is founded, and to which everythingrefers that is to be said on the subject, namely, where
the Lord Christ speaks in the last chapter of Matthew, v. 19:
Go ye therefore and teach all nations, baptizing them in the
name of the Father, and of the Son, and of the Holy Ghost.Likewise in St. Mark, the last chapter, v. 16:
He that believeth and is baptized shall be saved; but he that
believeth not shall be damned .
In these words you must note, in the first place, that here
stand God’s commandment and institution, lest we doubt
that Baptism is divine, not devised nor invented by men. For
as truly as I can say, No man has spun the Ten Commandments,
the Creed, and the Lord’s Prayer out of his head, but
they are revealed and given by God Himself, so also I can
boast that Baptism is no human trifle, but instituted by God
Himself, moreover, that it is most solemnly and strictly commanded
that we must be baptized or we cannot be saved, lest
any one regard it as a trifling matter, like putting on a new red
coat. For it is of the greatest importance that we esteem Baptism
excellent, glorious, and exalted, for which we contend
and fight chiefly, because the world is now so full of sects
clamoring that Baptism is an external thing, and that external
things are of no benefit. But let it be ever so much an externalthing here stand God’s Word and command which institute,
establish, and confirm Baptism. But what God institutes and
commands cannot be a vain, but must be a most precious
thing, though in appearance it were of less value than a straw.
For to be baptized in the name of God is to be baptized not
by men, but by God Himself. Therefore although it is performedby human hands, it is nevertheless truly God’s own
work. From this fact every one may himself readily infer that it
is a far higher work than any work performed by a man or a
saint...
Therefore I exhort again that these two the water and the
Word, by no means be separated from one another and parted.For if the Word is separated from it, the water is the same as
that with which the servant cooks, and may indeed be called
a bath-keeper’s baptism. But when it is added, as God has
ordained, it is a Sacrament, and is called Christ-baptism. Let
this be the first part regarding the essence and dignity of the
holy Sacrament.
In the second place, since we know now what Baptism is,
and how it is to be regarded, we must also learn why and for
what purpose it is instituted; that is, what it profits, gives and
works. And this also we cannot discern better than from the
words of Christ above quoted: He that believeth and is baptized
shall be saved. Therefore state it most simply thus, that
the power, work, profit, fruit, and end of Baptism is this,
namely, to save. For no one is baptized in order that he may
become a prince, but, as the words declare, that he be saved."
Within Martin Luther's explanation of Baptism, he outlines perfectly the very definition of a sacrament as an outward sign of the grace they signify. It is by the Word of God being spoken, and the waters of Baptism being blessed, that the Holy Spirit moves through the actions of the sacrament to infer the grace of salvation. And, as you can see, Martin Luther clearly quotes the scriptures in which this sacrament was instituted by Christ as a salvific event.
Okay, now to quote from the Catechism of the Catholic Church (1257)
God has bound salvation to the sacrament of Baptism, but He himself is not bound by his sacraments."
I encourage you to read further on this issue. The link to Luther's Larger Catechism is http://www2.hn.psu.edu/faculty/jmanis/m~luther/mllc.pdf
The link to the Catechism of the Catholic Church is http://usccb.org/catechism/
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