Obama: America is still a "Triple-A" country

Updated 4:18 p.m. Eastern Time

President Obama said Monday that America remains a "Triple-A country" despite the decision by ratings agency Standard & Poor's to downgrade U.S. debt in the wake of the fight over increasing the debt limit.

"Markets will rise and fall," he said. "But this is the United States of America. No matter what some agency may say, we have always been and always will be a Triple-A country." (watch his comments on the credit rating above.)

Mr. Obama's comments seemed designed in part to help soothe the wounded psyche of the nation in the wake of the downgrade, which has been followed by a worldwide stock sell-off. The Dow Jones Industrial Average fell more than 600 points Monday.

Downgrade puts new pressure on Congress to act
Who's to blame for the downgrade?
CBSNews.com special report: America's debt battle

"For all of the challenges that we face, we continue to have the best universities, some of the most productive workers, and the most innovative companies and the most adventurous entrepreneurs on earth, and what sets us apart is that we have always not just had the capacity, but the will to act," he said.

Mr. Obama quoted investor Warren Buffett's comment that if possible, he would give the United States a Quadruple-A rating, adding that "I and most of the world's investors agree."

But he went on to acknowledge: "That does not mean we don't have a problem."

Mr. Obama noted that S&P attributed its downgrade in part to doubts about the U.S. political system's ability to act to reign in the nation's ballooning deficit and debt, and called for a "balanced approach" to deficit reduction - one that includes both tax increases on high earners and "modest adjustments" to Medicare and other health care programs.

"Making these reforms doesn't require any radical steps," he said. "What it does require is commonsense and compromise."

The president pointed to proposals for such reforms from his failed negotiations with House Speaker John Boehner for a "grand bargain" deal to raise the debt ceiling, as well as proposals from the Senate's "Gang of Six" and other negotiations.

"It is not a lack of plans or policies that is the problem here," he said. "It is a lack of political will in Washington. It is the insistence on drawing lines in the sand. A refusal to put what is best for the country ahead of self-interest or party or ideology, and that is what we need to change."

In a statement following Mr. Obama's comments, Boehner called a deficit-reduction plan that includes tax increases "the wrong approach."

The bipartisan committee to be formed as part of the deal to raise the debt limit has been tasked with coming up with at least $1.2 trillion in savings, and Mr. Obama said he hopes the downgrade will give their effort " a renewed sense of urgency." He said the committee will have the "full cooperation" of his administration and noted that he will present his own recommendations in the coming weeks.

The president also repeated his calls for Congress to extend the payroll tax cut as soon as possible and unemployment insurance benefits and to authorize infrastructure investment.

But the remarks seemed chiefly designed to buck up a demoralized nation in the wake of the S&P downgrade. He lauded the "grace" of the American people in dealing with crises, saying the "perseverance and the courage" of the American people is a cause for hope for the future. (Watch Mr. Obama's full statement at left)

Mr. Obama closed his remarks by honoring the American men and women killed over the weekend after their helicopter was attacked in Afghanistan, saying they embody the best aspects of their country.

"We will press on, and we will succeed, but now is also a time to reflect on those we lost in the sacrifices of all who serve, as well as their families," he said. "These men and women put their lives on the line for the values that bind us together as a nation. They come from different places, and their backgrounds and beliefs reflect the rich diversity of America. But no matter what differences they might have as individuals, they serve this nation as a team. They meet their responsibilities together. And some of them, like the 30 Americans who were lost this weekend, give their lives for their country. Our responsibility is to make sure that their legacy is an America that reflects their courage, their commitment, and their sense of common purpose."

Below, CBS News' Anthony Mason and Norah O'Donnell discuss what Washington will do next following Mr. Obama's remarks:

From CBS Moneywatch.com:

Why It's Too Late to Sell Stocks
How Markets Have Responded to Past Sovereign Downgrades
Can the Fed Save Investors?
8 Reasons Why the Panic Is Misplaced
Treasuries Surge Upon S&P Downgrade

[jenbbb]

I just watched this video about AAA Country http://webtvs.filmannex.com/aaacountry/films/movie/aaa-country-trailer-1/28310

Is it a movie? Does anyone know what it is?

[arthanyel]

by fairtax71 August 9, 2011 12:08 PM EDT
Their are immediate things he could do to get this economy rolling but he chooses not to do them.

----- cut here -----

Really? Pray tell, enlighten us with your wisdom, what are these things? Name one thing the President could do immediately that would get the economy rolling that he is choosing not to do. Any one will do.

[arthanyel]

Before I respond - as I expected, you have no idea how the process actually works. None of these things are things the President can do. The Congress could, but the President cannot. So stop saying there are things he could do - that's a lie.

Now to your "wisdom":

Zero capital gains. You recommend adding an additional huge burden to the deficit, further cutting revenues BELOW the already historic lows, BORROWING MORE MONEY TO GIVE TO RICH PEOPLE to accomplish - what exactly? Cutting the capital gains rate doesn't help businesses at all. With te rate now less than half the income tax rate, there is already every incentive to invest in the hopes of generating gains - further cuts would make no difference.

Tax Amnesty. Because it was done once, companies have been building cash reserves offshore hoping we'll do it again rather than pay the taxes they already owe. And if we do it again, we incentivize them building up offshore reserves AGAIN, only more so. So the temporary addition of cash will be offset by a greater REDUCTION in cashg in the future - hardly a wise plan.

If the Congress passes a tax amnesty for the second time, they have to insure there are penalties for abusing this system - or they should levy a special tax on offshore holdings so that the incentive is to bring the money back and pay only NORMAL taxes on it. But Republicans are unlikely to do either.

And you keep saying he is "anti business". If you think he hasn't been "business friendly" please cite a SINGLE THING Obama has done that isn't business friendly. Just one.

[arthanyel]

He could publicly ask and privately push the Congress to take up something he wants to do, but the Republicans in the House have made it clear they aren't listening. And these two suggestions he shouldn't push because they are both bad ideas.

Your statement that it's "anti business" to suggest everyone should pay their fair share of taxes is self-referential and not anti-business at all. To suggest his speech caused the market to drop is silly - the market was in freefall from the opening bell, by the time he gave his speech the market was almost closed - and no trader is listening to the President's press conference when the overall market has so much activity. They probably didn't have time to eat, let alone watch the President.

It is not "class warfare" to point out the rich are getting richer, the poor are getting poorer, and we are borrowing money to give rich people tax cuts. Those are just the FACTS. And as for "Obamacare", your father employed 65 full time employees and doesn't give them benefits? Because the only way the Health Care act affects those businesses is if they do not provide ANY health insurance for their employees. Since most businesses over 50 people already provide health benefits, the Health Care act doesn't affect them AT ALL.

If you want to argue that 50 is too low a limit and that a higher limit (say, 100 employees, or 200 employees, or whatever) is a better limit then THAT is a factual discussion. I might even agree with you. But use facts, not Faux News talking points.

[arthanyel]

by slappy-mcjohnson August 9, 2011 3:04 AM EDT
arthanyel - it's the responsibility of both parties

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As for the downgrade being the responsibility of both parties, we will have to agree to disagree there. It is true that the financial situation we are in is a result of actions by both parties. It is true that both parties must take responsibility for the solution. And it is true that unwillingness to take bold action is a problem on both sides.

But that said, when the President lays out clearly to everyone what kind of a solution is needed to avoid the downgrade (the "grand bargain"), the Republicans completely refuse to consider revenue additions, the Republicans play the political game that brings us to the brink, the Republicans refuse to compromise, the Republicans only can get tepid support for the non-deal that gets passed, and the Republicans claim the deal they got was "98% of what they wanted" - well, I am going to say if you are looking ofr someone to blame, you have to point at the Republicans.

[JWinATL]

As far as I know, the President layed nothing out. His "grand bargain" was generalities. Hindsight is 20/20, arthanyel. The Democrats had bupkiss until the very end. The Repubs passed two separate proposals that were shot down by Dingy Harry before they even came to a vote in the House. He had absolutely NOTHING to add. The Dems were toothless in this whole process. I guess it's true - if you repeat a lie often enough it becomes fact to someone.

[arthanyel]

JWinATL: The "grand bargain" was exactly what was needed to avoid a downgrade - a comprehensive start to cutting psending, increasing revenues, and making adjustments to entitlements. Conservatives like to say "nothing was layed out" but that is merely propaganda - a great amount of detail was discussed in private (as it should have been). Democrats did not have "bupkiss" until then end - but since all comprehensive soltuions require revenue increases and Republicans refused any increases at all, there wasn't anywhere to go with it - plus the House refused to allow submission of any Democratic plan.

Yes, Republicans put forward two badly written, one-sided, non-starter bills, wasting everyone's time and accomplishing nothing. Democrats didn't waste the time, and did the duiscussions in priovate trying to get a deal which was REAL and could pass - and what we got is the best thing the Republicans would vote for, which was nothing much.

If you believe a single thing I said is not true - which thing? Because the only ones believing repeated lies are conservatives that keep saying (falsely) that Democrats "put nothing forward".

[nottellin1]

Unbelievable how much sniping is on these comment pages, the same posters, writing the same thing over and over.

I you all spent half the time writing to your legislators instead of commenting, DC might actually hear your voice. I guarentee they are not reading your thoughts here.

Grow up and make a change happen, rather than simply complain.

[arthanyel]

Very good point, nottellin1.

Everything that I post here I have said all my Congress Critters and I am very active politically outside of these pages as well. And my Congressman and Senators are doing a fine job representing my views.

[JWinATL]

I agree totally! Continuing to spew insults and degradation toward each other is not constructive. We need the Fair Tax!!! We need everyone to have skin in the game.

I am sick and tired of hearing how the Dems jacked up the debt to $14.5 trillion and then they call the Repubs unpatriotic for not wanting to pay the Dem's bills! The spending Obama has done was done largely without Republican support, but we are supposed to sit in the corner and quietly pay for it AND let them continue to spend. That is why there was conflict over the increase to the debt ceiling. The feeling was we needed to cut spending in some redundant programs, make the budget work, and maybe have something left over to pay amortization on our debt in addition to the interest. But nooooo!!! The Dems all cry "Foul!" These are the same people who took out 125% loans on their houses and thought their lenders were meanies for expecting to be repaid for the money they loaned. I am tired of all of you.

[tsigili]

What part of the AA+ rating did he not understand? All of it? Oh, sorry Mr. President, I was told you were an intelligent person.

[2happy2ride]

When you borrow 42% of EVERY dollar you spend, a AAA rating is a fairytale.
Unlike Clinton. . . obama definitely inhaled.

[arthanyel]

When you borrow 20% of every dollar you spend TO GIVE TAX BREAKS TO RICH PEOPLE AND CORPORATIONS, you are certifiably insane - or Republican, because that's where that money is going, thanks to Republican actions.

[Martha12345]

When my children ever young the was a movie called the Never-Ending Story. In the movie there was this great cloud called the "Nothing". It consumed everything and left nothing in it's place. Now I have a name for President Obama. The Nothing.

[arthanyel]

Conservative propaganda, 100% fact free.

[RobAla]

There is nothing more frustrating than listening to a cocky and arrogant guy who does not have a clue as to what he is doing. President Obama makes me want to pull my hair out.

I know that he finds himself in a tough place, as the United States has very big problems. Prior to becoming President, President Obama had absolutely ZERO executive experience. He had never had to be responsible for any budget of any kind - not on the state level, not on a local level, or even at the level of running a business. What drives me crazy is his arrogant crap, along with his terrible policies that are running the greatest nation in the history of the world into the ground.

[gep1955]

America is a Triple-A country with a Triple-F president. S&P said no downgrade if Cut-Cap & Balanced had passed. The Marxists in the senate tabled it. Last time I looked the Tea Party didn't run the senate.

[arthanyel]

Conservative propaganda, 100% fact free. Cut cap and balance is a conservative fantasy in three acts, and does not include revenue increases which the S&P listed as the #2 reason for the downgrade. Nor did CC&B cut enough spending or restructure entitlement programs for long term control.

Try again.

[arthanyel]

obamasocialist: Obama did just not "inherit 5.8% unemployment" - he inherited an economy shedding 750,000 jobs PER MONTH. In the first three months of his presidency before ANY action he could take was in place, the economy lost 2.25 MILLION jobs. Since that point they slowed, then stopped the job losses, and then started recovering, and have recovered over 70% of the total losses. Had they not acted and had the stimulus spending not worked, the unemployment would be significantly worse.

The downgrade is primarily due to Repubclians as I state in the previous comment.

Cut, Cap and Balance was a stupid, one sided and unworkable bill as I also stated in the previous comment.

In 2012 since the majority of voters (65% to 80% depending on your poll) think the Repoublicans are dead wrong to exclude revenues, and since the Republicans have made it clear that their agenda isnt jobs, it isnt fixing the economy - it's attacking the Democrats and forcing their minority ideology both social and economic on all of us, I think we won't be making the doisasterous miostake of letting them retain power, much less giving them more.

[Harden_Tar]

Mr. Obama reminds me of the Kevin Baker character at the end of "Animal House" during the parade scene. There is smoke, fire, and people are running around in a panic in the background while Baker is saying "Remain calm. All is well".