News / USA

Obama: Renewed Sense of Urgency for Debt, Deficit Reduction Amid Market Turmoil

President Barack Obama speaks in the State Dining Room of the White House,  Aug. 8, 2011
President Barack Obama speaks in the State Dining Room of the White House, Aug. 8, 2011
TEXT SIZE - +

U.S. President Barack Obama said Monday that the recent downgrade of America's credit rating by a key rating agency, and the impact that has had on global financial markets, underscores the importance of further steps to deal with the nation's debt and deficit problems.  

The president delivered his statement as U.S. markets were suffering sharp losses on top of last Friday's 500 point drop, and following declines on Monday in major stock indexes in Europe and Asia.

Speaking as the Dow Jones Industrial Average passed the 450 point loss mark, President Obama referred to Friday's downgrade of the nation's credit worthiness from AAA to AA by the Standard & Poor's rating agency.  He said it was due more to doubts about the ability of the U.S. political system to act after weeks of political wrangling, rather than the ability of the United States to pay its debts.

Saying markets and global investors continue to believe that America's credit rating is AAA,  Obama said the downgrade underscores the need to continue getting the nation's fiscal house in order.

"The fact is we didn't need a rating agency to tell us that we need a balanced, long term approach to deficit reduction," said President Obama. "That was true last week; that was true last year; that was true the day I took office."

Obama said it was clear that a prolonged debate over raising the U.S. government's borrowing limit, in which the threat of default was used as a "bargaining chip" could damage the U.S. and global economies.

This, he said, along with a string of economic disruptions in Europe, Japan and the Middle East, has roiled markets, dampened consumer confidence and slowed economic recovery.   

President Obama said defense and domestic spending cuts in the recent debt ceiling compromise must be followed by further tax reforms and "modest adjustments" to programs such as Medicare, which, he said, are achievable without radical steps.

Americans are worried about the future,  Obama said, but the real test is how the U.S. responds to economic challenges.

"How we respond to those tests - that is entirely up to us," said Obama. "Markets will rise and fall, but this is the United States of America.  No matter what some agency may say, we have always been and always will be a AAA country."

Standard & Poor's defends the U.S. rating downgrade, saying it in line with increasing U.S. debt levels and the inability of Congress and the president to achieve political consensus.

Treasury Secretary Timothy Geithner said S&P used "terrible judgment," and that U.S. treasury securities continue to be an absolutely safe investment.   

President Obama said Monday he hopes that the Standard & Poor's downgrade will inject a renewed sense of urgency for a yet-to-be-formed bipartisan congressional committee to reach a compromise.  The so-called super committee is supposed to provide its recommendations by November for another $1.5 trillion in spending reductions beyond the approximate $900 billion in initial cuts.  If no agreement is reached, automatic cuts would occur.

Mr. Obama said he soon will be outlining proposals for the congressional committee to consider in the next stage of the debt and deficit-cutting deal.

White House spokesman Jay Carney:

"He will be contributing to that process, not driving it or directing it," he said.

In his remarks, President Obama referred again to what he called a lack of political will in Washington and an "insistence on drawing lines in the sand" that he said needs to be changed as the deficit and debt debate moves forward.  



You May Like

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends More

Turkish Law Gives Spy Agency Controversial Powers

Parliament approves legislation to bolster powers of intelligence service, which government claims is necessary to modernize and deal with new threats Turkey faces More

Video Face of American Farmer Changing

Average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Face of American Farmer is Changingi
X
Mike Osborne
April 18, 2014
The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid