United States President Barack Obama vowed on Monday that America would always be a “triple A country,” fiercely defending U.S. creditworthiness after a historic debt downgrade and said the economy could be fixed with political will.
Speaking against the backdrop of tumbling global stock markets, Mr. Obama said he would present his own solutions for mending the U.S. debt woes in the “coming weeks,” but again called on Republicans to accept tax hikes on the richest Americans.
As he spoke, jittery markets sent the Dow Jones Industrial Average plummeting to 4.5 per cent, sinking below the 11,000 points level. The broader S&P 500 lost 5.7 per cent, while the tech-heavy Nasdaq Composite plunged 5.6 per cent.
The President was making his first public comments on the historic decision by ratings agency Standard & Poor's on Friday to downgrade the AAA credit rating on the U.S. sovereign debt for the first time to AA+ with a negative outlook.
“No matter what some agency may say, we have always been and always will be a triple A country,” Mr. Obama said, arguing that global investors still saw the U.S. economy as one of the safest investments in the world.
But he conceded that fiercely partisan combat in Washington was hampering efforts to fix the economy, and called on all sides to unite on a balanced solution to ease the deficit tipped to hit $ 1.6 trillion this year.
“Here's the good news. Our problems are imminently solvable. And we know what we have to do to solve them,” Mr. Obama said at the White House.
The President said the solution to the U.S. deficit woes was a mixture of tax rises on the most affluent Americans and modest cuts to state-run health programmes plagued by rising costs, like Medicare for the elderly.
“Making these reforms doesn't require any radical steps. What it does require is common sense and compromise,” he said. The formula was a failed part of an Obama push for a “grand bargain” during the fierce debate over raising the U.S. government's borrowing authority, which wrapped up last week.
Republicans refuse to countenance any kind of tax rises and Mr. Obama's Democratic allies have balked at any cuts to Medicare or other aspects of the American social safety net.
“It's not a lack of plans or policies that is the problem here. It's a lack of political will in Washington,” Mr. Obama said. “It's the insistence on drawing lines in the sand, a refusal to put what's best for the country ahead of self-interest or party or ideology. And that's what we need to change.”
