2011-08-09 10:29

WASHINGTON - US President Barack Obama on Monday dismissed an unprecedented downgrade in America's credit rating, insisting investors will stand by the United States even as stock markets plunged. Obama said Washington can fix its ills by showing more political will.

US President Barack Obama delivers a statement on the lowering of the US credit rating and the Afghan helicopter crash in the State Dining Room of the White House in Washington, August 8, 2011. [Photo/Agencies]

"Markets will rise and fall, but this is the United States of America," Obama said. "No matter what some agency may say, we've always been and always will be a triple-A country."

Investors did funnel money on Monday into Treasurys, a sign of confidence in the United States as a safe long-term investment even after Standard & Poor's had dropped the US credit rating down a notch. But the broader story was far more worrisome: stock markets kept tumbling over concerns about the weakening US economy and the debt crisis in Europe.

The Dow Jones industrials plummeted to its worst drop since December 2008.

For Obama, a president seeking a second term from voters desperate for better times, the pressure for results is intense.

He is the first president to have a credit downgrade come on his watch. And whether blaming him is fair or not - he actually pushed for the type of deal that might have prevented a downgrade - presidents are always accountable.

After saying nothing about the downgrade all weekend, Obama sought Monday to use it as leverage against a Congress whose members are on an August vacation. He said a downgrade ought to compel a smart compromise from the bipartisan committee of lawmakers that will soon be tasked with shaping up to another $1.5 trillion in difficult deficit reduction.

Obama said he would offer his own recommendations, although the White House suggested that would likely mean ideas Obama has already presented in recent weeks. Obama on Monday said Congress should ask wealthy Americans to pay more in taxes and should make adjustments in programs like Medicare. Both ideas face fierce political opposition.

"I assure you, we will stay on it until we get the job done," the president assured. But Congress remains in divided political hands, limiting Obama's ability to keep that promise.

Heading into a campaign-style economic tour before going on his own vacation, Obama's overall rating hovers below 50 percent in most polling. He is on far more perilous ground when it comes to public views on the key issue for voters - his handling of the economy - where his approval rating is under 40 percent in most major recent surveys.

Obama's aim is to keep heat on Congress to enact concrete measures, separate from the grueling debt debate, which could help people in the short term.

He pressed lawmakers to extend a payroll tax cut and unemployment benefits in September as a way to "put money in people's pockets and more customers in stores".