(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.
Make everyone in Congress sign up for Obamacare, including Obama. Then, talk about raising the debt ceiling, but only after a balanced budget is presented.
TeaParty: nothing but a bunch of anarchists funded by groups like Club for Growth and the Koch brothers.
Which will be the bigger "fire", what they are trying to do now, or when the debt gets so big it can no longer be ignored?
Let's balance the budget first, then talk about raising the debt ceiling.
As for the possibility that we will run out of money and go bankrupt, I formally put my bid of $1.00 for the White House....
So, if 72% of Americans think the shut down is bad just how did those that are responsible get elected? Guess many voters not listening to what being said. Keep voting for them...they will still respect you in the morning!
THIS GUY is the one of Americas BIGGEST PROBLEMS
The tp is polit-ically mimicking the tallyban fanaticks
Speaker Cruz driving the next train off the cliff. Worked so well last time.
If the Republicans manage to get their way and force the Democrats to give, then shutdowns will become a regular feature of Congress – neither party is going to pass on a successful tactiv. Otoh, if the Democrats win on this, then no more shutdowns for many years as representatives will have learned that it doesn't work. As to being bankrupt – if we are so bankrupt, then why are there so many people ready and eager to loan us money – from all over the world?
An open letter to America's Congressional Representatives
Start looking for a new job, you're finished.
Meh, paying off the debt is overrated. Do you even know who owns most of America's debt?
Hint: It isn't the Chinese, who only own 8% of our total debt.
Guess what, America and American's own the vast majority of our down debt. Contrary to popular belief, we are still primarily owned by ourselves.
The whole idea of a debt limit is stupid. A limit doesn't really exist if you constantly keep raising it. The debt limit just creates needless panic and financial instability. There are other ways of controlling spending, but refusing to pay what you already borrowed isn't one of them.
you folk on here that continue to Blame the Democrats and Obama on this spectacle with the House are just plane Stupid.
This guy Cruz and these other ultra right wing fanatics are putting not only this Country and all its citizens in Peril, but the rest of the World.
We default, they default.
I agree that our spending is out of hand , but this is not the way to go about it.
Send Cruz back to Canada with there liberal Policies and see if the Canadian media even comments on his BS .
I spent 3 Hours on the Phone cancelling any contributions to the Republican Party and there dam Constant phone calls to me. .I am not the only one .
You people that vote and support them need to put yourselves aside and look at the damage they are doing. Not only to us , but the rest of the World.
Whether you like Obama or not . This is not the way to go about it. And before you throw your crap back at me . No I am not one of those dam Liberals that you point the fingers at.
Our national debt now is lower as a percent of GDP than it was under Reagan. The solution is economic growth, not shutdowns and defaults. Keep in mind that most of the debt ($8 trillion out of $10 trillion when Obama took office) was run up under Reagan and the two Bushes. Most of Obama's addition to the debt is the result of GW Bush's tax cuts, wars, and recession. The debt is far less dangerous than the Republican's insanity.
Of Course Lew is defending the partisan position on everything.
Politicians can stop spending for the year and fix problems, heath care, the system is seized, Immigration, people are in limbo, Benghazi, there is investigation needed to avoid another one, for partisan blame, to help the system work better.
The USA is not a power machine as many may think. The whole currency and debt system is at fault. The USA Government does not borrow they only print more money to satisfy their debt ratio. You guys are a joke.
Last sentence should read NOT for partisan blame!!!!!!! to help the system work better.
The tea-party are akin to Islamists – they will kill the host and die with it.
Kruz is another shinig example of the depths that radical Tea Party politicians will sink to in their disgusting effort to obstruct President Obama. Ever since their loss in 2012, their ONLY intent has been to delay, damage, and undo ANY attempt by the President to help America recover after the Republican owned banks nearly ruined the economy. Kruz is worse than a terrorist. He's a turncoat.
Does this mean we stop giving BILLIONS in aid to other countries. How much does Pakistan get each year to let us fly drones over their border area and blow up what we want? 2 BILLION?
I am retired and my Social Security Check will be deposited 10-25-13. If the
United States defaults, I guess I will not be able to pay my power bill, rent, or buy groceries.
I am sure the IDIOT CONGRESS will get paid.
The GOP (Greedy Old Party) and Pill Poppin Rush Limbaugh will celebrate President Obama failing.
Quick! lock the doors, here come the Chineese Repo Men.
The Republicans have overplayed their hand. ObamaCare is here. It will not be scuttled – live with it. At worst millions of Americans will have affordable health care. The whole community benefits. Why are the conservatives against progressive policy. They were against FDR's new deal, against social security, LBJ's Medicare, and now ObamaCare. I call it ordering the artillary in on your own position. It will be veryinteresting to see how the R's getting out of this corner they painted themslves into.
So let me get this straight – the glitches caused by far more people trying to buy health insurance than were expected is proof that America is against Obamacare and the Republicans know this, despite the results of the 2012 election, which was essentially a referendum on Obamacare. So the nobody who wants it are flooding the web sites. I guess understanding logic requires education. A Canadian terrorist is holding this country hostage, and the Speaker of the House is in favor of it. Somebody pointed out that when we were younger, the world was normal and we took LSD to make it weird. Now the world is weird, and we take Prozac to make it normal. Did someone put LSD in the drinking water supply for DC?
Dear Lew...where have you been as the country is broke and going deeper into the dark abyss via Federal spending that is unchecked...time to crash the system for a "re-boot"...bring it on Congress, let's get it over!!!
What is the point of debt ceiling if the government is going to raise it anyway .