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WASHINGTON – In an op-ed to be published in the Monday print edition of USA Today, Treasury Secretary Jacob J. Lew writes that with eight days (as of Monday) until Treasury runs out of borrowing authority on Nov. 3, some in Congress are endangering our country’s economic progress by once again manufacturing a crisis for our country. By waiting to the last minute to act on the debt limit, Congress could cause a terrible accident. Once again, Secretary Lew calls on Congress to do the responsible thing for our country and raise the debt limit as soon as possible.
Read the pieceonline.
Honor our obligations, raise the debt limit By Jacob J. Lew
Our economy has made remarkable progress since the Great Recession. American businesses havecreated 13.2 million jobssince early 2010, jobless claims are at40-year lows,consumerconfidence remains healthy andsmall businesses are planning further increases in their payrolls. We are on track for further economic growth — yet witheight days, as of Monday, until Treasury runs outof borrowing authority on Nov. 3, some in Congress are endangering this progress by once again manufacturing a crisis for our country. By waiting to the last minute to act on the debt limit, Congress could cause a terrible accident. This is not an abstraction; failure to raise the debt limit would mean devastating impacts for taxpayers, consumers and businesses.
In2011 and 2013, Congress pushed our country to the brink of potential economic catastrophe. After reaching our country’s borrowing limit, some in Congress seriously considered what should be unthinkable: choosing to default on our obligations.
Increasing the debt limit does not authorize future spending or fund new programs — it merelyenables us to paythe obligations that Congress has already incurred. Thisincludes paying the salariesof our troops, providing benefits to veterans and Social Security recipients, and reimbursing hospitals for taking care of the sick. One former Republican governor likened refusing to raise the debt limit to eating a meal and leaving a restaurant without paying. In this case, the full faith and credit of the United States is at stake.
Inboth recentdebtlimit standoffs, Congress waited until the last minute before voting to raise the debt limit. We learned that this dangerous brinkmanship can do real harm to consumer and business confidence,raise short-term borrowing costsfor taxpayers andhurt our credit rating. In 2011, the United States credit rating wasdowngraded for the first timewhen Congress came dangerously close to causing a default. In previous debt limit impasses, we also saw increasedfinancial market volatility,widening credit spreadsand adecline in stock prices— all of which translates into real problems for Main Street by lowering household wealth and increasing borrowing costs for businesses. According to the non-partisan Government Accountability Office, the 2013 debt limit impasse cost the American taxpayerbetween $38 million and $70 millionin additional borrowing costs alone. We should never allow uncertainty surrounding the debt limit to imperil the U.S. and global economy, but that’s especially true at a time when our nation is seen as the source of strength in the global economy.
Since we reached the debt limit in March, Treasury has been using extraordinary measures to borrow money and pay our bills. Each time that we have new information on the debt limit, I share it with Congress, as only it has the ability to take the necessary action. Most recently, I notified Congress that we will run out of extraordinary measures no later than Nov. 3. Myfirst letterwas seven months ago, and now we have eight days, as of Monday, before we exhaust our borrowing authority.
Unless Congress acts, after Nov. 3 we will be running the government on only the cash currently available, a profoundly irresponsible course of action. By that date, we estimate that we will haveless than $30 billion cashavailable to fund a nearly$4 trillion enterprise— clearly not enough when our net expenditures can reachas much as $60 billionon some days. No sensible business would run itself this way, and the federal government should be no different.
For 226 years, we have been a nation thatconsistently paysour bills. Our creditworthiness is a critical part of our strength as a nation, and protecting that strength is a solemn responsibility. Congress should not threaten to squander that strength. There is no way of knowing the full extent of the damage defaulting on our obligations would cause for the U.S. and global economy, and it should be inconceivable to find out.
Once again, I call on Congress to do the responsible thing for our country and raise the debt limit as soon as possible. While time is short, I am confident that our congressional leadership will heed that call and protect the American people from unnecessary and unprecedented harm.