Obama Reacts To Credit Downgrade: ‘We’ve Always Been And Always Will Be A AAA Country’

Aug 8, 2011 3:38pm

ABC News’ Mary Bruce (@marykbruce) reports:

In his first public reaction to Standard & Poor’s decision Friday to downgrade the nation’s credit rating, President Obama reassured markets today that “no matter what some agency may say, we've always been and always will be a AAA country.”

While “a legitimate source of concern,” Obama said he hoped the first-ever downgrade would give lawmakers a “renewed sense of urgency” to agree on a bipartisan deficit reduction plan before the end of the year.

“Our problems are eminently solvable, and we know what we have to do to solve them. With respect to debt, our problem is not confidence in our credit. The markets continue to reaffirm our credit as among the world's safest. Our challenge is the need to tackle our deficits over the long term,” the president said in a speech in the White House State Dining Room.

As Republicans and Democrats continue to squabble over which party is responsible for the downgrade, the president issued a stern warning to Congress to stop playing politics with the nation’s economy.

“It's not a lack of plans or policies that's the problem here.  It's a lack of political will in Washington.  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,” Obama said.

S&P downgraded the U.S. from its AAA rating to AA+ in part because the rating agency lacked confidence that political leaders in Washington would make the choices necessary to avert a long-term fiscal crisis. “After witnessing a month of wrangling over raising the debt ceiling, they doubted our political system's ability to act,” Obama explained.

The president called on Congress to supplement last week’s deal to raise the debt ceiling with tax reforms and adjustments to entitlement programs like Medicare and for the first time said he would outline his own proposals. “I intend to present my own recommendations over the coming weeks on how we should proceed.  And that committee will have this administration's full cooperation, and I assure you we will stay on it until we get the job done,” he said.

In the meantime, the president continued to urge Congress to pass stalled measures that he said will help spur job growth, including extending the payroll tax cuts and unemployment insurance and investing in infrastructure.

“These aren't Democratic proposals, these aren't big government proposals:  These are all ideas that traditionally Republicans have agreed to, have agreed to countless times in the past.  There's no reason we shouldn't act on them now.  None,” Obama said.

The president also responded to Saturday’s deadly helicopter crash in Afghanistan that took the lives of 30 U.S. troops, saying, “their loss is a stark reminder of the risks that our men and women in uniform take every single day on behalf of their country.”

“These men and women put their lives on the line for the values that bind us together as a nation… Our responsibility is to ensure that their legacy is an America that reflects their courage, their commitment and their sense of common purpose,” he said.

“I know that our troops will continue the hard work of transitioning to a stronger Afghan government and ensuring that Afghanistan is not a safe haven for terrorists. We will press on and we will succeed,” Obama concluded.

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