Congress 'playing with fire' on debt limit, warns Treasury Secretary Jack Lew (+video)
Making the rounds of TV news shows Sunday, Treasury Secretary Jack Lew said failure to raise the US debt limit means 'credit markets could freeze, the value of the dollar could plummet, US interest rates could skyrocket.'
Treasury Secretary Jack Lew assumed his Mr. Sobersides role Sunday, warning the nation and the world that a failure by Congress to raise the US debt limit next week amounts to “playing with fire.” He didn’t use the fiddles and Rome analogy, but he might as well have.Skip to next paragraph
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It’s a message Mr. Lew has been making for at least a week now, the main difference being the inexorable march toward Oct. 17, when the United States reaches its $16.7 trillion federal debt limit and the government plunges into financial and economic territory it’s never seen in its history. Eleven days and counting.
“Credit markets could freeze, the value of the dollar could plummet, US interest rates could skyrocket,” the Treasury Department said in a report Oct. 3. “The negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.”
Speaking on four TV news shows Sunday morning, Lew continued the drumbeat of admonition.
“Congress is playing with fire,” he said on CNN’s “State of the Union.” “If the United States government, for the first time in its history, chooses not to pay its bills on time, we will be in default, there is no option that prevents us from being in default if we don’t have enough cash to pay our bills.”
Some have suggested that President Obama could use the 14th Amendment to the US Constitution to unilaterally raise the debt limit, but the administration says that's not so.
"The White House has spoken quite clearly to this," Lew said. "The president does not have the authority to take action in that kind of a way. The president consulted with his lawyers, and that's the conclusion that he's reached."
"You know, there is a desire here for there to be some kind of a magic solution," he continued, addressing the current government budget shutdown as well as the debt-limit crisis. "There is an easy solution ... A majority in Congress would do the right thing if given a chance to vote to open the government. A majority in Congress would do the right thing if given a chance to let us pay our bills. Congress needs to work, they need to do their job, but the majority needs to be given a chance."