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Obama Presses Congress For Action On Jobs After Credit Downgrade

  • Kent Klein

The Standard & Poor's building in New York, August 2, 2011

The Standard & Poor's building in New York, August 2, 2011

Amid an avalanche of negative economic news in recent days, President Barack Obama is calling on lawmakers to pass legislation he says will put Americans back to work. The president spoke as another of his financial advisers stepped down, and as a major credit agency lowered the rating of U.S. debt for the first time.

The past week began on a promising note for President Obama, as he and Republicans in Congress reached an agreement on raising the nation’s debt ceiling and cutting its deficit.

But as the week went on, stock values tumbled, and the S&P credit agency late Friday downgraded the rating of long-term U.S. debt for the first time ever, from the highest rating of AAA to AA+.

Even Friday’s better-than-expected numbers on July unemployment showed an economy that is still not generating enough new jobs to fuel a recovery.

In his weekly radio and Internet address Saturday, Mr. Obama said that with the debt limit debate over for now, he is focusing on job creation. “But in the short term, our urgent mission has to be getting this economy growing faster and creating more jobs. That is what is on people’s minds. That is what matters to families in this country," he said.

The president will campaign relentlessly in the coming weeks for public support for his economic program. The campaign will include a bus tour of the central United States.

White House press secretary Jay Carney issued a written statement Saturday, calling on both Democratic and Republican lawmakers to work together to strengthen the economy and reduce U.S. deficits. The statement came one day after the S&P decision to downgrade the U.S. credit rating.

Administration officials say S&P made a faulty decision in downgrading U.S. debt. They say they believe the call was based more on the political disagreements during the debt ceiling debate than on the nation’s ability to pay its debts. Credit rating agencies Moody’s and Fitch continue to rate U.S. debt at AAA.

In his weekly address, Mr. Obama again called on Congress, when it returns from vacation in September, to pass aspects of his economic plan. He wants extended tax cuts for low- and middle-income Americans, tax credits for companies that hire military veterans, patent reform, and final approval of free-trade agreements with Panama, Colombia and South Korea. “It is time Congress finally passed a set of trade deals that would help displaced workers looking for new jobs, and that would allow our businesses to sell more products in countries in Asia and South America. Products stamped with three words: Made In America," he said.

The weekly Republican address was given by Representative Michael Grimm, from New York City. Despite the deficit reduction agreement, he said much of the economic uncertainty comes from Mr. Obama’s over-spending. “The latest jobs report shows that President Obama’s stimulus-driven policies are simply not working. The over-spending, over-taxing and over-regulating coming out of Washington is creating uncertainty and holding our job creators back," he said.

The president must also find a new chairman for his Council of Economic Advisers. Austan Goolsbee stepped down from that position Friday to resume his academic career at the University of Chicago. No replacement has been named.

Goolsbee’s departure leaves Treasury Secretary Timothy Geithner as the last member of the president’s original economic team still working in the West Wing.