In his remarks to the country about the S & P downgrade, President Barack Obama said the country needed tax reform and “modest adjustments to health care programs like Medicare.”

Here’s a transcript of the President’s excerpted remarks:

“We knew from the outset that a prolonged debate over the debt ceiling, a debate where the threat of default was used as a bargaining chip, could do enormous damage to our economy and the world’s. That threat, coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery.

“So all of this is a legitimate source of concern. But here’s the good news. Our problems are imminently solvable. And we know what we have to do to solve them.

“With respect to debt, our problem is not confidence in our credit. The markets continue to reaffirm our credit as among the world’s safest. Our challenge is the need to tackle our deficits over the long term.

“Last week we reached an agreement that will make historic cuts to defense and domestic spending. But there’s not much further we can cut in either of those categories. What we need to do now is combine those spending cuts with two additional steps, tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare.

“Making these reforms doesn’t require any radical steps. What it does require is common sense and compromise. There are plenty of good ideas about how to achieve long-term deficit reduction that doesn’t hamper economic growth right now.

“Republicans and Democrats on the bipartisan fiscal commission that I set up put forth good proposals. Republicans and Democrats in the Senate’s gang of six came up with some good proposals. John Boehner and I came up with some good proposals when we came close to agreeing on a grand bargain.

“So it’s not a lack of plans or policies that is the problem here. It’s a lack of political will in Washington. It’s the insistence on drawing lines in the sand, a refusal to put what’s best for the country ahead of self-interest or party of ideology. And that’s what we need to change.”