October 6th, 2013
10:39 AM ET
8 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. waitnonasunnyday

    Do not Fund PPACA. Do not raise the Debt Ceiling without an Amendment to Balance the Budget. HOLD THE LINE TEA PARTY!!

    October 6, 2013 10:49 am at 10:49 am |
  2. Richard Long

    "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 US Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America's debt weakens us domestically and internationally. Leadership means that "the buck stops here." Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."
    Barack Hussein Obama.

    October 6, 2013 10:53 am at 10:53 am |
  3. wendel

    to bad we can't throw them out. Republicans think this is a game to win. Disgusting bunch of idiots. Ol greasy rand paul on tv this morning and the Orangeman both lying through their teeth and making it up as you go. We all know who is to blame .

    October 6, 2013 11:03 am at 11:03 am |
  4. Alan S.

    There is just one person preventing the shutdown from ending and that is Boehner who won't allow a simple up and down vote which would anger the Tea Party Extremists. So the shutdown it seems is an attempt for one man to hang on to his job as Speaker of the House. Shame on him when so many Americans have lost their jobs!

    October 6, 2013 11:19 am at 11:19 am |
  5. Gurgyl

    Congress is bunch of idiots, so are Americans to elect these thugs.

    October 6, 2013 11:26 am at 11:26 am |
  6. Jeff Frank (R-Ohio) "Right Wing Insanity"

    How do you raise the debt limit on a bankrupt country?

    October 6, 2013 11:36 am at 11:36 am |
  7. nvwoman

    A few issues seem to be the real reasons: Obama may succeed in lowering National Debt (according to Forbes, he has); ACA may succeed.

    October 6, 2013 11:56 am at 11:56 am |
  8. Rhonda Rahn

    The GOP are not only ruining the United States, but their obsession to stop anything Obama will ruin the entire world. We have to get rid of the zealous, self-centered Republicans! Let's all vote the Republicans OUT of the House in 2014.

    October 6, 2013 11:56 am at 11:56 am |
  9. Scott

    Lew persistently avoided any answer to Chris Wallace's question "who has signed up for Obamacare" this morning. He doesn't want to say, "Nobody." Obama would fire him if he were honest.

    October 6, 2013 12:01 pm at 12:01 pm |
  10. Marie MD

    Americans' finances and lives, after a recovery from 2008, are going down the toilet and the only ones who will be blamed are the teatards.
    Why are we allowing a foreign terrorist from Canada to destroy our country and we just sit back doing nothing?
    A march on Washington should be in their future.

    October 6, 2013 12:01 pm at 12:01 pm |
  11. MIJohn

    Nah, they're not playing with fire. That implies a chance of not being burned. The GOP is sticking its head into the heart of the blaze face-first and expecting a typhoon to magically appear and put it out. What we should be asking is how long until the rest of the body comes to its senses and cuts off the head.

    October 6, 2013 12:07 pm at 12:07 pm |
  12. Peg

    Threatening to use the debt ceiling as leverage is to threaten to destroy the USA.

    The TeaGOP keep saying they are willing to completely destroy the US and world's economies to keep Obamacare (in their minds) from doing harm to the economy.


    A guy said it best in CNN Your Money yesterday when he said that the GOP are behaving like the ex-husband who says he is going to kill his ex-wife because he loves her

    So, to be more accurate they are – Criminally Insane

    October 6, 2013 12:42 pm at 12:42 pm |
  13. CB

    One thing is for sure. I will not vote republican for a long time. In fact, the party as a whole has decided to hurt hard working people to play politics. It is shameful.

    October 6, 2013 12:42 pm at 12:42 pm |
  14. Sunflower52

    Yes Tea Party, please hold the line. Then everyone has a reason to despise you. You talk about being all about America, yet you seem to have no problem in trying to bring it not just to its knees but to its death. You may not all be uneducated imbeciles, but you all certainly come off that way. If the Republicans could only take off their blinders and see what this radical bunch is doing to them, perhaps they would do the intelligent thing and split the party. It is truly unbelievable that such a small faction of fanatics can hold an entire party hostage. Sad, sad, sad.

    October 6, 2013 12:49 pm at 12:49 pm |
  15. 1montanagal

    "Some very extreme parts of Congress took control." That about sums it up. WHEN are the American people going to vote these right-wing, Tea Party anarchists out of Congress? Answer: 2014. I hope they are all on the bread line after the mid-term elections.

    October 6, 2013 12:52 pm at 12:52 pm |
  16. PortOurTroops

    We may be seeing the end of American democracy as we know it. It looks like the Republican are preaching a brand of selfishness the world has never known.

    October 6, 2013 12:52 pm at 12:52 pm |
  17. Ron L

    This whole thing is so sickening and unnecessary. A simple clean CR and raising of the Debt Ceiling put on the House floor for a vote would have cleared this all up. The problem in doing that was political in that it would have passed with a MAJORITY of Democratic votes and probably ended Mr. Boehners Speakership. That last sentence is the ROOT problem of this situation. If we blow past the Debt Ceiling without a passing of the bill, THERE IS NO IDEA HOW BAD THINGS WILL BE!!!!! It is reckless and dangerous.

    October 6, 2013 12:54 pm at 12:54 pm |
  18. Aerin

    Republicans are willing to burn the House down if they could be King of the Ashes.

    October 6, 2013 01:04 pm at 1:04 pm |
  19. Danny Mitchell

    It appears that your president and democrat congress are the ones refusing to pass any funding bills. You can't just put your fingers in your ears and call it governing.

    October 6, 2013 01:04 pm at 1:04 pm |
  20. stopnthink78

    "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." No good choices? How about not spending more than we make? Nothing funnier than hearing someone intellectualize how borrowing more money is a good choice. I'm convinced that to most people the debt is intangible, it's a number that we'll never "really" have to pay back. If you support this theory, I hope you also support a strong military. We're so disconnected. The elected officials want more money now for one simple reason, they don't want paying it off to be their problem. No one is happy when you cut the credit card up.

    October 6, 2013 01:11 pm at 1:11 pm |
  21. maldeguerre

    "Rookie Senator Cruz, Speaker Boehner, and the GOP at large are flying by the seats of their pants, improvising on the fly. When they reach the "crash and burn" finale of their reckless gyrations, do we as a Nation want to be on board?

    October 6, 2013 01:18 pm at 1:18 pm |
  22. treblemaker

    This is more than just the USA possibly not raising the debt ceiling. If the USA can't pay its bills after the 17th, watch what happens when all the foreign governments who have placed their currency in our banks start withdrawing their money from our system to protect their interests. It will make the Great Depression of the '30's seem like a Gold Rush boom.

    October 6, 2013 01:25 pm at 1:25 pm |
  23. KicktheCan

    Sooner or later, the Federal Government will need to address unsustainable $1 trillion annual deficit spending and the $17 trillion national debt

    The threat of the 'catastrophic' default is the only way to get the dysfunctional President and Congress to negotiate and compromise on spending.

    October 6, 2013 01:33 pm at 1:33 pm |
  24. Mike Denney

    This from a guy who–until forced to find a new way to sign his name–could have had his signature replicated by a SpiroGraph.

    October 6, 2013 01:38 pm at 1:38 pm |
  25. stone

    The real problem is the fact that the country has to borrow to pay its debts. How did we get here?
    Something isn't right, and it did NOT just start this year with Health Care...:)

    October 6, 2013 02:06 pm at 2:06 pm |
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