Lew Warns Congress on Waiting Until Last Minute on Debt Limit

Treasury Secretary Jacob J. Lew warned Congress against waiting to increase the debt ceiling and said the administration wouldn’t accept an agreement that defunds or delays President Barack Obama’s health-care law.

“Trying to time a debt limit increase to the last minute could be very dangerous,” Lew said today in remarks prepared for a speech to the Economic Club of Washington, D.C. “If Congress does not act and the U.S. suddenly cannot pay its bills, the repercussions could be serious.”

Lew told Congress last month in a letter that lawmakers need to raise the $16.7 trillion debt ceiling by the middle of next month, when he expects that the Treasury will have about $50 billion left to fund the government.

Lew said the idea of “prioritization,” paying some bills and not others, was “unworkable.”

“We should never be put in a position where we have to pick which commitments our nation should meet,” Lew said. “How can the United States choose whether to send Social Security checks to seniors or pay benefits to our veterans?”

With two weeks left before government funding expires at the end of this month, congressional Republicans are setting up a confrontation with Obama over a provision in the health-care law that allows individuals to sign up for insurance exchanges starting Oct. 1.

Lew said in his remarks that Obama won’t negotiate over the debt ceiling, though “the president is willing to negotiate over the future direction of fiscal policy.”

To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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