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Obama says U.S. needs to tackle long-term fiscal challenge

(Xinhua)

08:59, August 09, 2011

U.S. President Barack Obama speaks to the media in State Dining Room of the White House in Washington D.C., capital of the United States, Aug. 8, 2010. The real economic challenge for the United States is to improve its long-term fiscal sustainability, Obama said Monday after Standard & Poor's (S&P) stripped the nation of its top-notch credit rating Friday. (Xinhua/Zhang Jun)

The real economic challenge for U.S. policymakers is to take effective steps to improve the long- term fiscal sustainability, U.S. President Barack Obama said Monday after Standard & Poor's (S&P) stripped the nation of its top-notch credit rating Friday.

Obama admitted the fiscal problem of the world's largest economy, but said at a White House press conference that the nation's economic problems are "solvable" with enough political will.

Obama told reporters that he hoped the downgrade move will give lawmakers a new sense of urgency to tackle the nation's deficit challenge in the long run.

No matter what credit rating agencies would comment, the United States has always been and will always be a triple-A country, Obama defended.

"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," he added.

The United States received a downgrade from S&P "not so much because they doubt our ability to pay our debt if we make good decisions, but because after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system's ability to act," he noted.

"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 after the downgrade has rattled global financial markets.

Obama last week signed a bill lifting the nation's debt limit through 2013 and cutting the deficit by more than 2 trillion U.S. dollars, but the deficit reduction package fell far short of a threshold of 4 trillion U.S. dollars cited by S&P to avoid a downgrade.

Obama held that there is not much room left to further cut the nation's defense and domestic spending, but policymakers could take additional steps including tax reform to ask the wealthiest to pay their fair share and make modest adjustments to health care programs like Medicare in a bid to balance the government's books.

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