WASHINGTON — Just hours after signing legislation to end the budget and debt-ceiling impasse and reopen the government, President Obama warned that the political crisis had set the economy back but assured investors the economy would recover as he outlined three priorities on his agenda for the remainder of the year.
This story first appeared in the October 18, 2013 issue of WWD. Subscribe Today.
Obama spoke from the White House after signing legislation that reopened the government Thursday after a 16-day shutdown, continued funding for federal agencies until Jan. 15 and raised the nation’s debt ceiling through Feb. 7, averting a default on U.S. Treasury notes. The legislation also gave back pay to hundreds of thousands of workers that were furloughed during the shutdown.
“These last few weeks have inflicted completely unnecessary damage on our economy,” Obama said. “We don’t know yet the full scope of the damage, but every analyst out there believes it slowed our growth.”
Obama noted that families have had to make do without paychecks and consequently cut back on spending, while potential home buyers received fewer approvals of mortgage applications and small businesses were unable to get loans.
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“We know that consumers have cut back on spending and that half of all ceo’s say that the shutdown and the threat of a shutdown set back their plans to hire over the next six months,” Obama said. “At a moment when our economic recovery demanded more jobs…we’ve got yet another self-inflicted crisis that set our economy back and for what? There was no economic rationale for all of this. Over the past four years, our economy has been growing, our businesses have been creating jobs and our deficit has been cut in half.”
On Wall Street, markets were mixed, but investors seemed generally content to push on once the immediate danger of a debt default had passed.
The S&P 500 Retailing Industry Group increased 0.7 percent, or 5.68 points, to 855.66, as the Dow Jones Industrial Average slipped fractionally, falling 2.18 points to 15,371.65. The S&P 500 gained 0.7 percent, or 11.61 points, to 1,733.15 — the index’s best close ever.
Obama rebuked Republicans for the political brinkmanship that brought the country to a potential default on its debt payments and temporarily hurt America’s credit rating, but he sought to assure financial markets that the economy would quickly rebound.
“Now, the good news is we’ll bounce back from this. We always do,” Obama said. “America is the bedrock of the global economy for a reason. Today, we want our people, businesses and the rest of the world to know that the full faith and credit of the United States remains unquestioned.”
The President also outlined three policy priorities for the rest of the year: negotiating a long-term budget deal, Congressional passage of comprehensive immigration reform and passing a farm bill.