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

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

India PM Modi's party distances itself from religious conversions

BJP under fire for being slow to rein in hardline affiliate groups allegedly trying to promote a Hindu-dominant agenda by luring Muslims and Christians to convert to Hinduism More

Anti-Whaling Group Found in Contempt of Court

Radical environmentalists who threw acid and smoke bombs at Japanese whalers in the waters off Antarctica continue their campaign to disrupt Japan's annual whale hunt More

UN's Ban Urges End to Discrimination Against Ebola Workers

Ban was speaking in Guinea on the second day of a whistle-stop tour aimed at thanking healthcare workers of the countries at the heart of the epidemic 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.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid