NEW YORK ( TheStreet) -- President Barack Obama laid the blame for the decision by Standard & Poor's to strip the United States of its triple-A rating on political wrangling on Monday, rejecting the idea that the downgrade is indicative of real doubts about the ability of the country to pay off its debt. Stocks weren't soothed by the speech, and the Dow Jones Industrial Average sank to a new session low shortly after the president finished speaking. The blue-chip index has broken below 11,000 for the first time since November 2010.
"They doubted the ability of our political system to act," Obama said of S&P's decision, saying the gridlock that early last week brought the United States close to default "wasn't constructive" as the "threat of default was used as a bargaining chip." "We didn't need a ratings agency to tell us we need a balanced approach to deficit reduction," Obama said, never mentioning Standard & Poor's by name. Obama also used the occasion to push for Congress to extend the payroll tax cut and unemployment benefits. He said if these moves aren't made it could cost the United States roughly one million jobs and half a percentage point of economic growth. "We should extend the payroll tax cut as soon as possible so workers have more money in their paychecks next year and businesses have more customers," he said. Obama noted that the action in the bond market, which is surging, shows that the world still has faith in the United States, saying "markets continue to reaffirm our credit as among the world's best." The president also advocated for "tax reform that will ask those that can afford it to pay their share," continuing to push for the removal of certain tax benefits for wealthy Americans that he was unable to get included in the compromise deficit-reduction legislation passed last week as part of the bill to lift the debt ceiling. Obama also expressed his faith in the tenacity of the American people and their ability to work through this difficult economic time.