Treasury Secretary Jacob J. Lew reiterated that the Obama administration won’t negotiate over the debt limit, saying he thinks lawmakers understand the need to preserve the U.S.’s “rock-solid” pledge to meet its commitments.
“We’re not going to be negotiating over the debt limit,” Lew told CNBC today. “Congress has already authorized funding, committed us to make expenditures. We’re now in the place where the only question is will we pay the bills that the United States has incurred.”
Lew yesterday told Congress in a letter that the U.S. will hit the $16.7 trillion debt ceiling in mid-October and urged lawmakers to raise the limit as soon as possible. Today he said the economy, while facing some restraints, has been growing at about a 2 percent pace.
“Without the headwinds of additional federal cuts, the economy should pick up a notch again,” Lew said today. “These kinds of manufactured crises, last-minute decisions that put the country on pins and needles, and people make economic decisions in a state of uncertainty -- we have some control over that, and I hope that Congress will act quickly to settle markets down so that they don’t get worried about these issues.”
The Treasury Department had previously said it probably will be able to finance government operations by using special accounting measures until after Congress returns Sept. 9 from its recess. Lew said Aug. 22 that a failure by Congress to raise the debt limit would “have disastrous effects for our nation” and could put at risk payments to Social Security recipients and veterans.
The Bipartisan Policy Center, a nonprofit research group in Washington, has estimated that the U.S. will reach the point where it is unable to pay its bills sometime between mid-October and mid-November unless Congress raises the ceiling.
House Speaker John Boehner said last month Republicans wouldn’t increase the debt ceiling “without real cuts in spending” that would achieve a further reduction in the deficit.
Lew also said there is room for negotiation on the budget.
“We’ve pressed very hard for the kinds of agreements that would do both the spending reform, entitlement reform, and tax reform,” he said. “We’ve hit a bit of an obstacle with the Congress because there hasn’t been an openness to doing the balance with the tax reform. The president has tried to reach out in every way that is possible to make it clear that he is looking for the sensible, common middle ground.”
Asked if there was any circumstance under which the administration would accept a delay or a defunding of parts of the health-care law known as Obamacare as part of a deal on extending funding for the government, Lew said “no.”
Lew declined to comment on whom President Barack Obama might nominate to replace Federal Reserve Chairman Ben S. Bernanke and said the president will announce his choice when he’s “ready.”