U.S. Treasury secretary nominee Jack Lew says the U.S. must avoid the automatic spending cuts scheduled to take effect next month, saying they would impose “self-inflicted wounds” on economic expansion.
Lew was commenting in written testimony prepared for tomorrow's hearing before the Senate Finance Committee, which is considering his nomination to succeed Timothy F. Geithner as head of the Treasury Department. The prepared testimony was obtained by Bloomberg News.
Lew said the U.S. must move forward with deficit reduction while leaving “sufficient room for critical investments.”
“We also have to avoid doing anything to degrade our national security or derail the economic recovery through abrupt moves in the short term,” Lew said. “That is why we cannot allow the series of harmful automatic spending cuts known as the sequester to go into effect on March 1.”
“These cuts would impose self-inflicted wounds to the recovery and put far too many jobs and businesses at risk,” Lew said.
President Barack Obama and Republicans are locked in a standoff over how to avert $1.2 trillion in automatic spending cuts start to take effect on March 1 unless Congress acts to stop or replace them. In addition, a temporary suspension of the nation’s $16.4 trillion debt ceiling only runs through May 18.
“We must put our nation back on a path of fiscal sustainability,” Lew said in the testimony prepared for tomorrow. “And we can do even more to shrink the deficit over the next decade through a balanced mix of spending reductions and tax reforms, and sensible reforms to Medicare that will help the program stay sound in the future.”