"We have to tackle this challenge," Obama said today in Reno. "We're going to cut spending in a way that's fair" without damaging investments in such items as medical research and basic science, he said.
Bond Yields
While the deficit dominates political debate in Washington, bond market yields in the U.S. are lower now than when the government was running a budget surplus a decade ago even as Treasury Department data show that the amount of marketable debt outstanding has risen to more than $9 trillion from about $4.3 trillion in mid-2007. The yield on the benchmark 10-year note is below the average of about 7% since 1980 and the average of 5.48% in 1998 through 2001, the last time the U.S. had a budget surplus, according to Bloomberg Bond Trader prices.
Ten-year yields fell 1 basis point, or 0.01 percentage point, to 3.40% at 2:32 p.m. in New York, according to Bloomberg Bond Trader prices. The Dow Jones Industrial Average rose 0.2% to 12,481.69 at 3:14 p.m., after surging 1.5% yesterday to its highest closing level since June 2008.
In addition to negotiations between the administration and Congressional Republicans over long-term federal spending, Congress must soon act to raise the federal debt limit.
'Immediate Spending Cuts'
Virginia Representative Eric Cantor, the No. 2 Republican in the U.S. House, said today that his party won't agree to a debt-limit increase "without binding budget reforms and immediate spending cuts."
Asked about Cantor's comment, White House press secretary Jay Carney told reporters traveling with Obama on Air Force One that it's "risky" for Cantor to suggest that "if he or others did not get what they wanted, that they would then throw the government into default."
While traveling in the western U.S., Obama is attending fundraising events in San Francisco and Los Angeles that are expected to bring in between $4 million and $5 million. The president returns to Washington tomorrow.