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Treasury Chief Lew: Raise Debt Ceiling to Avoid 'Terrible Accident'

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Treasury Secretary Jack Lew

By    |   Monday, 26 Oct 2015 12:58 PM

Treasury Secretary Jack Lew has urged Congress to raise the debt ceiling or risk “manufacturing a crisis” and risking a “terrible accident” for the nation.

Lew has warned lawmakers that the government's ability to use accounting steps to pay its bills for veterans, Social Security recipients, federal employees and others will run out early next month.

"We are on track for further economic growth — yet with eight days, as of Monday, until Treasury runs out of borrowing authority on November 3, some in Congress are endangering this progress by once again manufacturing a crisis for our country. By waiting to the last minute to act on the debt limit, Congress could cause a terrible accident," Lew wrote in USA Today.

He added that Congress had pushed the U.S. "to the brink of potential economic catastrophe" in 2011 and 2013 by waiting until the last moment to raise the then-debt ceiling.

Since 1960, Congress has acted 78 times to raise the debt cap or revise the definition of the debt limit — 49 times under Republican presidents and 29 times under Democratic presidents, according to the Treasury's website.

Unless the cap is raised beyond the current limit of $18.1 trillion, the Treasury is seen running out of money to pay bills in full and on time by Tuesday next week. It would then be left with only incoming taxes and fees to cover expenses, which will be insufficient, CNBC reported.

“Once again, I call on Congress to do the responsible thing for our country and raise the debt limit as soon as possible. While time is short, I am confident that our congressional leadership will heed that call and protect the American people from unnecessary and unprecedented harm,” he wrote.

Meanwhile, Congressional Republicans say they are short of the votes for raising the debt limit and avoiding a first-ever government default. With barely a week before deadline, there's no plan on what to do, the Associated Press reported.

It's a huge problem for House Speaker John Boehner and a potential nightmare for his successor-in-waiting, Rep. Paul Ryan, R-Wis.

GOP leaders promised Friday that the House will act next week — just days from a Nov. 3 deadline. Increasing the government's $18.1 trillion borrowing cap so that it can continue to pay its bills in full and on time would prevent a potential meltdown in the financial markets and save the Republican Party from presiding over a default on U.S. obligations.

"The debt limit will have to be raised, but we've got to do something to deal with it for the future," said Majority Leader Kevin McCarthy, R-Calif. "We've got a lot of ideas cooking."

But in the same breath, House GOP leaders warn that they can't summon even minimal support for the kind of debt limit increase demanded by President Barack Obama — one that's free of any concessions to hardline conservatives. They are still holding out hope for some kind of add-on to make the politically toxic vote more palatable.

Too bad, say Democrats, who point out that Congress passed a debt-limit increase just last year without add-ons. And all but two of 188 House Democrats have promised to vote for the measure, which means it would only take just 32 out of 247 Republicans to produce a winning vote of the full House.

Top House Democrats scoff when told that GOP leaders say they might not be able to even deliver that minimal number.

"Then they ought to all be fired," said Rep. Steny Hoyer of Maryland, the No. 2 House Democrat. "It is inconceivable to me that there aren't 30-plus Republicans to vote to make sure their country is solvent."

The White House on Friday reiterated that Obama will not negotiate with the GOP on the debt limit. "This is asking the Congress to pay bills that it's already incurred," said spokesman Eric Schultz.

An actual default — which would occur if the government can't pay bills like a $14 billion tab for Social Security benefits on time — wouldn't come for another week or so beyond the Nov. 3 target, according to calculations by the Bipartisan Policy Center, a Washington think tank.

The debt limit fight is the latest in a long saga. For years, the party in control of Congress had to deliver many of the votes to pass debt increases, whether or not it controlled the White House. The debt limit was often added to other legislation but was not taken hostage in hopes of extracting concessions from an opposition president.

But after tea-party conservatives came to dominate the House in 2011, Boehner, R-Ohio, demanded and won $2.1 trillion in spending cuts in exchange for a comparable increase in the debt cap.

That was before Obama was re-elected. Since then, the president and his Democratic allies have been adamant that the legislation won't be taken hostage by Republicans demanding concessions. Last February, Boehner and Senate GOP Leader Mitch McConnell of Kentucky eased a debt increase through Congress by relying on almost unanimous Democratic support.

Republican gains in last fall's midterm elections, along with a handful of retirements of leadership allies who voted to raise the borrowing cap last winter mean that Boehner and McConnell need to find additional GOP votes to raise the cap.

And the politics inside the Republican Party on the debt limit have only gotten messier. Boehner is resigning next week after pressure from tea party forces, in part because he regularly turned to Democrats to get must-pass legislation like last year's debt limit increase through the chamber.

"I believe they truly don't have the votes. It is not just a negotiating posture," said David Schnittger, a former longtime Boehner aide. "It's something nobody wants to vote for."

Only 28 House Republicans voted with virtually every Democrat last year to boost the debt ceiling; 19 of those lawmakers remain in Congress. Because of GOP electoral gains, Boehner would have to come up with a dozen or more additional Republicans to pass a "clean" debt limit measure with nearly all of the chamber's Democrats.

McCarthy recently told reporters — "I do not see 218 for any clean (debt limit) bill," referring to the number of votes needed to pass legislation through the 435-member House.

However, some GOP lawmakers are open to supporting the debt measure despite opposing it last time, among them Reps. Ed Whitfield of Kentucky, Mike Simpson of Idaho and Mike Coffman of Colorado.

"It is the responsibility of the majority to do it," Simpson said, adding that he'd probably switch his vote from last year, cast as he faced a tea party challenger in his primary race.

"If it had to have my vote, yeah," Coffman said. "The fact is we have to get it done."

(AP Congressional Correspondent Erica Werner contributed to this report.)

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Treasury Secretary Jack Lew has urged Congress to raise the debt ceiling or risk “manufacturing a crisis” and risking a “terrible accident” for the nation.
Lew, Congress, Debt Limit
Monday, 26 Oct 2015 12:58 PM
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