October 6th, 2013
10:39 AM ET
9 years ago

Lew: 'Congress is playing with fire' on debt ceiling

(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.

Filed under: Government Shutdown • Jack Lew • national debt
soundoff (128 Responses)
  1. Mr. Canadian

    Heres an idea Obama why dont you stop paying your governement until they reach a deal it would get things done a little faster dont you think

    October 7, 2013 02:52 am at 2:52 am |
  2. Mike

    It amazes me reading this stream how no one is talking about solutions to the debt – only that they want the credit cards limit raised. All the bad things that everyone – including Obama's henchman Lew – keep sounding off about.......don't you realize that all your fears are going to be realized? Don't you realize that not dealing with this now just ensures that it will and will so much worse if you don't deal with this incredible debt issue now? Every single time this gets brought to a head – everyone says "not now". Everyone accuses the Republicans of not coming up with solutions – but that is not true.......its just that you don't like their solutions. You have been convinced that every one of their solutions will cause you harm. You have been convinced that those that wish to stop the incredibly criminal reckless spending are the criminals vs the ones that keep lying and say you can have everything you want – ignore these people that say you cannot. And the Socialists of course will tell you it is the rich that cause the problems – not government. The Socialists tell you that it is the ones that are saying to stop spending like a fool that are causing the problems – not those that wish to keep spending $3 for every $2 they make. The Socialists will tell you everything you want to hear........keep listening......the Pied Piper from hell is blowing his horn and everyone is following him into the ravine. The greed & stupidity of Americans is going to give them exactly what they fear the most very soon.......rampant abject poverty throughout the nation. And it is the greed of the American people that will have caused it.......for it is that greed that has led them to elect liars that tell them everything is OK........everything is fine.........just raise the debt limit so we can continue to spend more than we have.........nothing bad will happen if we do.........you can everything we promised you.........retirement......medical care............all of it.......don't worry..........we will go after the rich cause they are evil anyway............

    And people buy it...........and scream at those that say we're in trouble and need to stop this. Unreal..........un friggin real......how incredibly stupid so many are that believe what Obama is saying.

    October 7, 2013 06:25 am at 6:25 am |
  3. Minnie Mouse

    This is a crisis that has never happened before and maybe in the end it's a crisis that has to happen to get spending under control in our government. This is sad but so true, and millions will suffer as a result of it to include myself as well.

    Someone has to do something to force the government to get spending under control, and regardless to what party it is or who is involved doing it, "What difference does it make"??

    Every department can be cut back to be more cost efficient, all "Entitlements" can be reformed, all spending that is not a necessity at all just 100% needs to be thrown out! There's so much money spend in fraud, wasteful spending, and outdated programs that is 100% uncalled. This is not how we should be running our government or our country.

    There has been more debt added under President Obama, and it can't all be blamed it on any wars. It's because there's no budget. The only way to get spending under control is to have a budget, at all times. We don't have this vital information for run our government off of. You can't just spend, spend because there's always consequences in the end. Right now the bills do need to be paid but what reason do you have to borrow more when what's going on is already out of control???

    The "Affordable Care Act" is not the problems. It's the administration of our government in it's entirety. People are not working together, people are not communicating. Where there are important issues going on in our country, the president is off in another state holding the microphone. Since your taking away non essentials, it's non essential to have the President of the USA rallying in front of public crowds or any business in any state. He needs to be rallying in Washington! His communication has to be within the government at this critical point and time, or nothing is ever going to be solved on anything.

    October 7, 2013 07:10 am at 7:10 am |
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