(CNN) – 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 October 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 October 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% of Americans disapprove of the shutdown, and more Americans blame congressional Republicans than blame Obama.
We seem to be blowing through these debt ceilings lke a fat girl goes through a box of pop tarts.
New polling shows GOP in grave danger now in losing the House in 2014 with 17 vulnerable Tea Party / Republicans losing voters.
We have to change the law to reflect no pay for congress if no balanced budget period. Also a reduction in there pension by 2% for every week that it doesn't get accomplished. Honestly a pension for elected positions, who the hell came up with this idea?
Treasury Secretary Jack Lew ,Obama's chief finical lair is no better than the fool little Timmy giethner.Obama can negotiate to end his enforced shut down
Osama attacked the World Trade Center to disrupt the US economy, but all that he had to do is to call Senator Cruz ..
How does borrowing money to keep the country paying its bills make any sense to any person? Does it help send out foreign aid? Spy on citizens and non-citizens? Fight drugs and terrorism?
Everything going on justifies why Ron Paul was the best candidate last election. We missed the boat on that one.
Senator Barrack Obama called raising the debt ceiling UNPATRIOTIC.... But now that he's president its the patriotic thing to do... How long is the press going to carry this 2 faced liars water for him.
What's the point of a 'debt ceiling' if every time you approach it, you raise it?
How about if we deem all of the security at the capitol building non-essential? Then they American public would be able to truly let congress know what they think of them. Scary, perhaps, but then again congress should be worried about what the majority of the American public thinks of them and are willing to do.
Threatening to kill the hostage if their demands aren't met, the GOP has gone insane.
There is no living – unless we are living in drama. Is our government nuts?
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. ... I therefore intend to oppose the effort to increase America’s debt limit.”
— Then-Sen. Barack Obama, floor speech in the Senate, March 16, 2006
China is loving this...just speeding up the process for them(google for Chinese university professor speech about the fall of the u.s). .
Give me the check book and I'll negotiate the budget with you later. I had an ex put it to me that way once. Believe it or not...she was fibbing! Imagine that!
Let's just quit getting involved in unnecessary wars ala g. bush. We should get out of Afghanistan now, because you cannot win there. No matter how many taliban or other groups we kill, there will always be someone else to take their place! You cannot get rid of all the terrorists in the world.
We are witnessing the end of the Republican party as we know it. They lost. It is law. It will be a horrible precedent to "negotiate" with these spoiled brats. This is NOT about further negotiation. It has already been negotiated and the Republicans LOST. Get over it. Fight the next fight. That is how it has always worked. It is unbelievable how the power of the corporations/lobbyists have ruined this great country. We are not great anymore. Hard to believe and even harder to accept. The Republican "leadership" is just proving it....
Well past time to march on Washington and take care of the terrorists
It is my observation here that the Republicans, and I am a Democrat that voted for Obama in 2008 but not in 2012, are looking out for the US's best interests this time. They know that we are overspent and cannot afford the luxuries of Obamacare. They want to ride out the issue of it for another year in order to get the country back in line monetarily. This is good for getting SOME of our debt DOWN, rather than raising HIGHER. Even Cruz makes more sense at this time than Obama so if he is the one tooting the horn here, then he is on the mark.
The only reason the GOP is against "ObamaCare" is because they gave it that name and they don't want an African American President to succeed and have something beneficial to those that cannot afford health care as his legacy. They said from DAY ONE of his presidency that their goal was to push him out of office and make sure he never succeeded at anything. That sounds racist to me and I am Caucasian. America needs to wake up to the fact that the only thing the Tea Party is interested in is a fascist government under their control where the rich get richer and the poor have less or nothing. They would harm the weakest segment of society to achieve their goals. Tea Party = disgusting, arrogant trash.
Boehner and friends threaten to destroy the economy if they don't get their way. What the hell happened to democracy? How is any of this even legal?
These tea party extremists are defying all explanation. Their stupidity is going to ruin the United States of America, as well as the rest of the world's economy. The afforadable care act is law - you cannot hold the entire country and world hostage just because you didn't get your way. The law of the land is the law of the land. If you want to change it, that's fine, do it through legislative means, not through political terrorism or extortion.
Unfortunately for the GOP, they have damaged their brand so badly over the past several years by moving to the extreme right. This recent display of complete disregard for the nation's future and economy will make it next to impossible for them to win another election.
As far as I'm concerned, a bill should be passed immediately that makes this type of extortion a criminal offence. What can you do when an extreme part of a political party is holding the nation at ransom?
"On the 17th we run out of our ability to borrow,..."
So maybe we should stop spending money we don't have.
They want to take down American?
Then if the succeed the Dems must impose a new 50% federal tax to all States that meet a oil revenue Threshold.
Just wait when the stock market plunges the Tea Party will come back to negotiate since their rich backers will finally feel the pinch.