Snap analysis: Obama fails to reassure markets after S&P move
WASHINGTON (Reuters) - What should a U.S. president say to stop stock markets from falling and reassure Americans that the country will be able to solve its debt and deficit problems?
President Barack Obama's first public comment about Standard & Poor's downgrade of U.S. debt to AA-plus from the top-notch AAA was not enough to stop a market plunge of 600 points, with investors uncertain if Washington can overcome political gridlock.
Here is a look at what Obama tried to achieve:
* Reassurance. Obama wanted to underscore to Americans that the United States remains the economic envy of the world despite the credit downgrade and will work its way through its fiscal problems.
"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 AAA country," he said.
* Persuasion. Obama sought to use the S&P downgrade to his advantage in a long-running dispute with congressional Republicans over how best to stem Washington's red ink.
Republicans want only spending cuts, a position Obama's Democrats believe is unreasonable given the pressing need to maintain spending for the social safety net.
While a joint bipartisan congressional committee will chart a way forward on reducing deficits by late November, Obama made clear where he stands: he wants to increase taxes on wealthier Americans and an end to some corporate tax loopholes to ease the pain of spending cuts.
* Influence. Obama said he would lay out a specific vision for deficit reduction to help the congressional committee.
That was considered the big news from his remarks because, technically, the recent deal on deficit reduction puts the next phase in the process in the hands of lawmakers in Congress.
Obama took some heat from Republicans during the debt debate for not delivering a plan on paper that outlined his deficit reduction ideas.
This decision may be in reaction to the criticism -- and a signal that he intends to stay in the throes of the debate even as the "super committee" and the rest of Congress takes up the baton.
(Editing by Jackie Frank)
- Co-pilot spoke last words heard from missing Malaysian plane |
- Crimea asks to join Russia after Soviet-style vote |
- Crimeans vote over 90 percent to quit Ukraine for Russia |
- Ukraine, Russia agree Crimea truce until March 21-Ukraine minister
- Global stocks rise, yen slips after peaceful Crimea vote |