Lew: 'Congress is playing with fire' on debt ceiling
Updated On: Oct 06 2013 05:02:30 AM CDT
With 11 days left for Congress to vote to raise the nation's borrowing limit, and the government shut down, Treasury Secretary Jack Lew underscored the importance of raising the debt ceiling to avoid dire consequences domestically and around the world.
"On the 17th we run out of our ability to borrow, and Congress is playing with fire if they don't extend the debt limit," Lew said, appearing Sunday on CNN's "State of the Union" with Candy Crowley.
"We are the strongest, most important economy in the world," Lew said. "We've already seen that with the government shutdown -- the kinds of gridlock and brinksmanship in Washington hurts people, and it hurts the economy."
Lew said the United States reached the debt limit in May but that Treasury has been "creating room to borrow using what are called extraordinary measures."
"They've been used so many times that they're not as extraordinary as they used to be," he said.
In a letter to lawmakers this week, Lew said, "If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history."
Lew also said he now estimates the Treasury will have less cash on hand to pay the country's bills in mid-October than he previously thought. If Congress fails to raise the borrowing limit, Treasury will only be able to pay the bills that come in with the cash it has on hand, plus whatever revenue comes in.
But what would happen on Oct. 18 if Congress does not raise the debt ceiling?
"We've never gotten to this point," Lew said. "We've never gotten to the point where the United States government has operated without the ability to borrow. It's very dangerous. It's reckless, because the reality is, there are no good choices if we run out of borrowing capacity and we run out of cash."
The government would not be able to pay its bill for the first time since 1789, Lew said, "because of a political decision."
Lew noted in an op-ed in USA Today last week that raising the debt ceiling does not allow the government to spend more, but merely allows the country to pay the bills it already owes.
Lew insisted that President Barack Obama will reach for middle ground, but that negotiations must take place after the shutdown ends and the debt ceiling is raised.
"The president has been, is, and will always be looking for that way to negotiate to find the sensible middle ground. He did it in 2011, he did it last year, he did it this year in his budget where he put forward tough policies," Lew said.
"You look at where we are right now. We've just gone through a couple of months, some very extreme parts of Congress took control. I don't think the leadership in Congress wanted a government shutdown. They ended up with a government shutdown because of the tactics of an extreme group trying to say we're willing to do real damage if we don't get our way."
"The president's message is clear. Congress needs to do its job: They need to open the government, they need to make it so we can pay our bills. And then we need to negotiate, and he is very much prepared to do that."
The government temporarily shut down on Oct. 1, after Republicans in the House held up the passage of a spending bill in an attempt to get changes or delayed implementation of the Affordable Care Act, Obama's signature health care initiative.
Since last Tuesday, House Republicans have turned their focus to passing piecemeal legislation, funding parts of the government. But Democrats and the White House have insisted on a bill that funds the entire government.
Meanwhile, more than 800,000 federal workers have been furloughed due to the shutdown. The House unanimously passed legislation in a session on Saturday to retroactively compensate these workers when the shutdown ends. The White House has said it would support this measure.
According to a CBS News poll released last week, 72 percent of Americans disapprove of the shutdown, and more Americans blame congressional Republicans than blame Obama.
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