Obama calls for political will to deal with economic challenges

President Barack Obama called Monday for political will from both parties to fix what he described as the country's "eminently solvable" economic problems in the wake of last week's downgrade of its credit rating by Standard & Poor's.

In remarks to reporters that were added to his daily schedule, Obama noted the Friday downgrade from AAA to AA+ occurred because "they doubted our political system's ability to act" following the grueling negotiations with congressional leaders that preceded last week's agreement on a debt ceiling increase.

Now it will take political will on the part of Democrats and Republicans, the president said, calling on all involved to stop refusing "to put what's best for the country ahead of self-interest or party or ideology."

"We knew from the outset that a prolonged debate over the debt ceiling, a debate where the threat of default was used as a bargaining chip, could do enormous damage to our economy and the world's," Obama said on a day the Dow plunged 634 points in reaction to the S&P downgrade.

"That threat, coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery." he said.

Calling the situation a "legitimate source of concern," Obama said the "good news" is that "our problems are eminently solvable. And we know what we have to do to solve them.

Later at a Democratic fund-raiser, Obama said he inherited the nation's economic problems.

"Look, we do have a serious problem in terms of debt and deficit, and much of it I inherited when I showed up," he said. "And because of the financial crisis, it got worse. So there's no doubt that we've got to fix our long-term finances."

The nation needs to tackle its budget deficits over the long term, he told reporters earlier, adding that he will be presenting his ideas for how to proceed in coming weeks as a special congressional committee set up under the debt-ceiling agreement begins its work.

Obama offered no details of his plan, and White House Press Secretary Jay Carney also provided no additional information when questioned later by reporters.

In his remarks, Obama said the issue of the most immediate concern to most Americans and to financial markets was the slow pace of recovery from economic recession.

He renewed his call for Congress to extend into next year the payroll tax cut that took effect in January as well as funding for unemployment insurance benefits, saying both steps would spur economic activity by putting money into the hands of consumers.
Read more