Jack Lew warned of the consequences if Congress fails to increase the debt ceiling, and urged leaders to act swiftly.
U.S. Treasury Secretary Jack Lew testifies before the Senate Finance Committee about the debt limit on Oct. 10, 2013. (Photo by Mandel Ngan/AFP/Getty Images)
U.S. Treasury Secretary Jack Lew warned Thursday morning of the consequences if Congress fails to increase the debt ceiling, and urged leaders to act swiftly.
“It is irresponsible and reckless to insist that we experience a forced default to learn how bad it is. If anything at all is learned from the shutdown, it will convince the deniers — or a majority who can work their will — to avoid putting the entire economy at risk in the name of an ideological fight,” Lew said during his testimony before the Senate Finance Committee.
The biggest threat to sustained growth in the economy is “self-inflicted wounds,” he said.
“Unfortunately, we now face a manufactured political crisis that is beginning to deliver an unnecessary blow to our economy — right at a time when the U.S. economy and the American people have painstakingly fought back from the worst recession since the Great Depression,” Lew said.
His comments came on day 10 of the government shutdown.
Lew reiterated that President Obama was open to a short-term deal on the debt ceiling.
“He’s not looking for a crisis,” Lew said. ”We cannot have the debt limit be something that is a threat to the economy…Give and take means everyone coming and doing hard things.”
Several Republican lawmakers recently neglected to acknowledge possible consequences of hitting the debt limit despite warnings from financial analysts. For example, Iowa Rep. Steve King on CNN called default talk “false demagoguery.”
The Treasury Department said Oct. 17 is the day it will run out of accounts to maintain the country below its borrowing limit and continue to pay bills.
But the country doesn’t know which day that will actually happen, Sen. Chuck Schumer of New York said at the hearing.
The country is “like a blindfolded man walking toward a cliff,” he said. “We don’t know which day we will fall off.”