On Economy, Obama Calls For Confidence, Action

President Obama spoke Monday for the first time since the ratings agency Standard & Poor's downgraded the credit rating of U.S. debt on Friday. The president reiterated plans previously announced to extend jobless benefits and payroll tax cuts to improve the flow of demand in the economy.

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MICHELE NORRIS, host: From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

MELISSA BLOCK, host: And I'm Melissa Block. The Dow plunged more than 5 percent, the NASDAQ nearly seven, and so ended a volatile day for investors. In a few minutes, we'll hear from a veteran trader about his day on the floor of the New York Stock Exchange.

NORRIS: First, as stocks dove downward this afternoon, President Obama stepped up to a lectern in the White House state dining room. It was his first public statement since the S&P downgraded the U.S. credit rating on Friday night.

President BARACK OBAMA: Markets will rise and fall, but this is the United States of America. No matter what some agency may say, we've always been and always will be a AAA country.

NORRIS: If Mr. Obama's words were intended to comfort investors, the markets did not show it. NPR's Ari Shapiro was there in the room as President Obama spoke. He joins me from the White House now to discuss the politics of the moment. Hello, Ari.

ARI SHAPIRO: Hi, Michele.

NORRIS: Now, what can President Obama do at a time like this?

SHAPIRO: Honestly, judging from his comments today, not a whole lot. Many of the points in his speech were things we have been hearing from him for weeks and months. You know, reduce the deficit by increasing tax revenue, closing corporate loopholes, changing Medicare and Medicaid. These are not new ideas. He says he'll offer specific deficit reduction suggestions in the coming weeks. They may look a lot like the grand bargain that House Speaker John Boehner walked away from during this last round of debt ceiling talks.

As President Obama said himself, our problems are eminently solvable, and we know what we have to do to solve them. The S&P's concern seems to be that the political will to solve them simply does not exist.

NORRIS: Was there any evidence that the credit downgrade might create that political will?

SHAPIRO: So far, none that I can see. I mean, in Iowa this week, Republican presidential hopefuls are bashing the president, saying he's to blame for the credit downgrade. Perhaps, that's to be expected from President Obama's rivals. Even Republican lawmakers who are not running for office, though, are blaming President Obama. They're also saying, absolutely no increase in tax revenue, which makes it sound like a kind of solution President Obama is talking about may be less likely. And Democrats spent the weekend calling it a Tea Party downgrade, pointing fingers squarely at the conservatives who they say held the economy hostage and now the economy is paying the price for it.

NORRIS: So a lot of finger wagging all around, but what about at the White House? Did they, too, point fingers?

SHAPIRO: It was striking how far they went to try not to point fingers. As a matter of fact, just before the president began speaking today, I was able to see the printed text of his comments on the teleprompter, and I watched a last minute edit that may give some insight. One passage of the speech referred to asking for sacrifice from those who can most afford to pay their fair share. And as I was looking at the teleprompter, the phrase wealthy Americans and corporations was highlighted and deleted from the text.

During spokesman Jay Carney's briefing this afternoon, he was asked whether he would blame this on the Tea Party. He refused to go that far. He blamed the downgrade on brinksmanship, but he did have one I-told-you-so moment. Here's what he said.

JAY CARNEY: We could not have been clearer leading up to the compromise on lifting the debt ceiling that there would be danger and damage done simply by playing chicken with our economy, playing chicken with the full faith and credit of the United States, and we've seen that.

NORRIS: So, Ari, if there is this broad acknowledgement that the president can't do much to turn this around, what can he do?

SHAPIRO: You know, you look ahead at his schedule this week and it looks not all that different from his schedule - well, it could have been a year or two ago. He's going to company in Springfield, Virginia, to talk about fuel efficiency, to Michigan to talk about the auto industry. He's doing a handful of re-election fundraisers. But will any of that restore the U.S. credit rating or get Congress to take these steps he's talking about? Not so far as I can see. I see no evidence that the gridlock is lessening.

President Obama might have called Congress back from its August recess. Maybe one reason he didn't do that is that there's no evidence that a special August session would be any more constructive and less bloody than the session we just finished in July.

NORRIS: That's NPR's Ari Shapiro, speaking to us from the White House. Thank you, Ari.

SHAPIRO: You're welcome.

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