Tags: lew | treasury | congress | debt | ceiling

Treasury Secretary Lew: Congress 'Reckless' if Debt Ceiling Not Raised

Image: Treasury Secretary Lew: Congress 'Reckless' if Debt Ceiling Not Raised

Sunday, 06 Oct 2013 09:34 AM

By Greg Richter

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Saying that the U.S. government is "just too important to the world," Treasury Secretary Jack Lew urged Congress to raise the country's debt ceiling by an Oct. 17 deadline because he has "run out of tricks" to keep it operating past that date.

Lew said it will be "dangerous" and "reckless" for Congress to pass an October deadline without raising the government's borrowing limit.

Appearing on CNN's "State of the Union" on Sunday, Lew said he has been using "extraordinary measures" to make room to borrow money since the United States hit its debt ceiling in May.

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"I have no more," Lew said he wrote in a letter to Congress last week. The government has $30 billion of cash on hand, but on any given day it can have a $50 billion-$60 billion positive or negative cash flow.

"It won't last very long," he said of the reserves.

Host Candy Crowley repeatedly pressed Lew to say whether disaster will fall if the deadline isn't met. She noted that Wall Street doesn't seem overly concerned and there is no threat to downgrade U.S. creditworthiness further. Would it be possible to just pay the interest, she asked.

Lew never answered directly, turning every response into pleas for Congress to act – and criticisms of Republicans for now allowing a vote.

What if the government can't pay Social Security, disability, Medicare, Medicaid and veterans payments on time, he asked.

Sen. Ted Cruz, R-Texas, appeared live after Lew's pre-taped interview, saying he was happy that although Lew refused three times to answer Crowley's question, he at least didn't demogogue the issue as Obama has.

Lew wouldn't answer whether the United States will default after Oct. 17, Cruz said, because "the answer is, of course not."

Lew said Obama has negotiated in the past and is willing to do so again, but Lew blamed tea party Republicans for stymieing the budget and the debt ceiling for political purposes. Most members of Congress would side with the president if House Speaker John Boehner, R-Ohio, would allow a vote, he said.

"There's no question that if we were to have the unthinkable happen and have the United States default, it would cause real problems," Lew said on "Fox News Sunday." "Why would anyone want to do that to the American economy at a time when the American people are showing their resilience?"

When host Chris Wallace asked Lew whether a default would result in catastrophic consequences for Americans, Lew answered, "I don't think there are serious people who think that the consequence is minimal. I mean, people say you can pay some bills and not other bills, but…what happens if you don't pay millions of people on Social Security? What happens if you don't pay hospitals and healthcare providers across the country? The consequences are immediate, and they're very bad. Congress needs to act."

Wallace suggested to Lew that President Barack Obama is "digging his feet into the ground" in response to a Republican offer of short-term spending-cut extensions to fund the government, as well as raising the debt limit to avoid a default, in an effort to carve out more time for negotiations.

"Chris, we need to separate the issues," Lew said. "Congress needs to do its job, and we then need to negotiate. The president has taken many steps over the last several years to show his willingness to negotiate. Republicans have not come forward and made comparable movement.

"The American economy would be well-served by getting some stability and some certainty," he continued. "These manufactured crises and this brinksmanship over and over again is bad for the economy."

Regarding Obamacare, Lew said it is "ridiculous" Congress is trying to hitch the defunding of a law onto the funding of the U.S. government.

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"Congress has to do its job, it has to open the government, it has to make it so we can pay our bills," Lew said. "That is not the way we should do business."

On NBC's "Meet the Press," Lew said "this shutdown is harming people every day…. it is ironic that Republicans are trying to reopen the government" as they are starting to see real pain."

Lew told the Economic Club of Washington last month that waiting until the last minute to raise the debt ceiling could lead to irrevocable damage to the economy.

And Lew's former chief of staff Mark Patterson told CNBC last week that a continued impasse over the debt ceiling and the government shutdown could lead to a recession.

 Amy Woods and Sandy Fitzgerald contributed to this report.

 

 

 


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