President Barack Obama warned Congress against using the debt ceiling as leverage in the spending debate, saying “markets could go haywire” and government payments, from Social Security checks to military salaries, will be held up if the limit isn’t raised.
Republican lawmakers “will not collect a ransom” if they delay increasing federal borrowing authority, Obama said today at a White House news conference. “There are no magic tricks here. There are no loopholes. There are no easy outs.”
Obama is seeking to head off a fight with Congress in the coming weeks over raising the $16.4 trillion U.S. debt ceiling as Republican lawmakers consider a government shutdown or default as a means to extract spending cuts. Republican leaders responded by saying that raising the borrowing authority must be linked to spending cuts.
U.S. Treasury bond investors — who most directly bear the risk of a government default — aren’t alarmed with yields on long-term U.S. debt near record lows.
Yields on the benchmark 10-year note were down one basis point, or 0.01 percentage point, to 1.86 percent at 12:21 pm New York time.