(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.
Here's the chance for Dems to refuse tax breaks for big oil.
They can also demand gun control legislation.
Is this how Americans live? If you can't pay you bills, do you really just continually try to increase your credit? Isn't there a point where the creditors say, "no more"? Don't the credit agencies step in and say, "here, let me help you pay down that debt. surrender your cards, and live on a sustainable budget"?
This matter has gone well beyond a political process and has moved into criminal territory. Cruz and Boehner should be arrested for sedition. Their actions and influence are harming the country in ways that may be irreversible.
The Tea Party is fragmenting the GOP and creating what may be akin to a third-party split. None of this will bode well for what I used to know as the Republican Party, in November, 2014.
I fully understand the concerns of both White House and Congress. However I do understand the Stupidity of entire political system not to realize and have the courage to reduce our military budget which is more than 10 of the most powerful counties combined to balance the budget once and for all..
I don't think the crises this country is currently in was the idea of our founding father who really fought to be the country it used to be before greed and selfish acts took over our ELECTED officials. If budget and debt is the problem with Republican party, then we should as citizens and tax payers remove all dead weight starting with congress and senate and get officials with real understating of Americans.
If the federal workers are going to be retroactively paid, then why not just let them work on an IOU basis?
If the federal workers are going to be retroactively paid, then why not just let them work?
Let's see Jack–Congress is "playing with fire"? I thought they were playing fire a few years back when they authorized Citigroup's bail-out. You remember that one don't you Jack? I think you received $950,000 of our tax dollars on that one.
If they are playing with fire, I'll bring some gasoline.
As workers are going to be be paid during the shutdown, why not let them work now? If that were done, some of the harm of the shutdown could be averted.
USA – the world's most heavily armed banana republic.
Madness. The GOP members should be arrested on charges of domestic terrorism and their voting rights terminated.
this is pathetic. we have a buncha overpaid underworked children in our government.
Want a solution to our debt problem? here is one. Declare States Sovereignty, secede from the Union, and tell WASHINGTON to eat its own debt that it created
The problem is that the t partiers (which are now synonymous with the Republican party) DON'T CARE. Not only they don't care, they actually want the government to default on its obligations. These thugs didn't come to govern, they came to destroy and dismantle our system of government. There is no appealing to their better senses because they don't have one. These are domestic terrorists that were borne out of that bunch of discontented bigots following their defeat in the civil war. They cannot stand that a black man is President. They cannot stand the fact that his policy on Affordable Health Care will be available for those that they detest and that their taxes will pay for portion of this care.They cannot stand the fact that civil rights is the law of the land. They are literally the very worst of humanity that this country has created.
My eror, I meant to say the followong
I am retired and will my Social Security Check 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
We will not default, unless Obama makes it happen. We continue to pay our taxes so the government is bringing in money. If the debt ceiling is not raised, the only thing that will happen is our debts will have to be prioritized. Just like a family, when income is lost debt is prioritized and unnecessary expenses are cut. Raising the debt limit is like a family continuing to spend as though they have two paychecks. Using or adding a credit card only makes the family go deeper into debt and while they may be able to live at their old standard, the debt will be overwhelm them. With this analogy, the government wants to apply for another credit card so they can continue to spend. We do not need another credit card.
While I whole-heatedly support the position of the Secretary, I would prefer he answer the questions he is asked rather than emulate Republicans and repeat the same unresponsive answer over and over.
Obama negotiated with the Pres of Iran but won't with the GOP. That speaks volumes about the person/leader he is/not. You libs haven't a clue and live with your heads in the sand. He's not the messiah. He's a terrible leader. It's either his way or the highway. He's NOT a leader.
Larry you are correct in all terms
Lin, these are payments for bills that Congress ALREADY approved. They are now due. If we don't pay these bills it will blow up our fragile economy and hurt the entire planet's financial situations just as it did when Bush & Republicans tanked the economy and created the worst recession since the Great Depression back in 2008 (before Obama). We must pay our bills as a Nation. This game playing by our politicians must stop.
Dear Lin: A Jewish banker would say 'No, that isn't how it works.' Duh.
Scary times, makes you wonder how much longer the system can take til it breaks. I think its time we rethink are foreign affairs and curb military spending. Its going to be hard to spread "Democracy" if we can't even be a model for the world. Seems like Obama is going going to be the fall guy. When its the previous administrations who dropped the ball. I put more blame on Clinton and Bush then the current Admin. Its really sad, but feels like we hit the cross road 20 years ago and took a wrong turn.
The Republicans are willing to destroy the Country for personal and political gains.
The sky is falling! The sky is falling! lol! Boot the bums outta there – NO MORE CAREER POLITICIANS!!!!!
charge it. Visa, Mastercard. Some plastic company will give you the credit. Oh and Larry should be arrested for sedition. Lets work on that one.