Press Releases

Lew Op-Ed: Lessons from a crisis

(Archived Content)


WASHINGTON – In an op-ed to be published in the October 21, 2013 edition of The International New York Times, Treasury Secretary Jacob J. Lew discusses the importance of putting an end to governing by crisis and focusing on accelerating economic growth and job creation.


Read the piece online.


The text of the piece follows: 


Lessons From a Crisis


A few days ago, a bipartisan majority in Congress voted to reopen the federal government and remove the cloud of uncertainty hanging over our economy. This put an end to a messy, and at times downright ugly, political process. But when you look through the noise of the moment, it showed that America’s leaders are committed, on a bipartisan basis, to doing the right thing for our economy and our standing around the world. The dollar is the world’s reserve currency and, for over 200 years, we have established ourselves as the backbone of the global financial system. The world now knows we are and will remain the safest, most reliable place to invest.


Make no mistake: What took place was a political crisis, not an economic one. When faced with a true economic crisis in 2008 — the worst since the Great Depression — our economy proved its resilience. Since then, the American people have painstakingly fought their way back from the brink. Now businesses are hiring, our economy is growing, and we have cut our deficits in half. Throughout this period, the United States once again became a source of strength for the global economy.


But we are not where we want to be. Growth is not strong enough, and job creation needs to accelerate. And one of the fundamental reasons our economy is not firing on all cylinders is Washington. Our economy has been poised to make serious strides over the last few years, but self-inflicted political wounds have gotten in the way time after time.


Without question, the government shutdown and the debt ceiling impasse have led to economic hardship in every corner of the country. While we do not yet know the exact magnitude of the damage, these events have generated unnecessary headwinds for the economy. We should never again take this country to the point of near-default in order to exact political gain.


It is time to put an end to governing by crisis and focus on accelerating economic growth and job creation. If we are open to what we can achieve together rather than simply setting our sights on our divisions, there is a lot we can do to support America’s workers and businesses. This is what the American people expect from their leaders in Washington.


We can start by hammering out a budget agreement that builds on the progress we have already made to lower our budget deficits. This is an opportunity to improve our nation’s long-term fiscal health, and it should be achieved through a comprehensive package that shrinks our deficits, protects Medicare and Social Security for those who rely on it, and expands our economy well into the future. That means closing wasteful tax loopholes and making targeted investments to improve our education system, increase domestic energy production, and expand our manufacturing base.


We must come together to fix the blunt spending cuts known as sequestration, once and for all. These indiscriminate, across-the-board cuts, which went into effect earlier this year, were intended to be so mutually disagreeable that they would force Congress to find agreement on a balanced package of deficit reduction measures. But that agreement was not reached in time. As independent economists and business leaders will tell you, these cuts have already slowed economic growth, just as the economy was getting traction. The nonpartisan Congressional Budget Office has estimated that by the third quarter of next year, sequestration will have reduced real gross domestic product by as much as 1.2 percent, which means as many as 1.6 million fewer American jobs.


In addition to tackling our budget challenges, Washington can take several actions to support economic growth.


Congress should pass comprehensive immigration reform. The bipartisan bill already passed by the Senate would strengthen our borders, provide a pathway to earned citizenship, and boost growth by more than a trillion dollars while reducing our deficits.


Another piece of bipartisan legislation that has passed the Senate, but not the House of Representatives, is the farm bill. Getting this bill signed into law is not only important for America’s farmers and protecting America’s most vulnerable children, it is important for our economy.


Finally, we need to come together soon to complete the bipartisan work that has already begun to reform our business tax code, modernize our housing finance system and renew trade promotion authority while repairing our deteriorating roads, highways and bridges.


As we move past the government shutdown and debt ceiling crisis, it is important to remember that the foundation of our democracy is the healthy competition of ideas. It is the lifeblood of our country.


But we must work across party and ideological lines for the good of the United States. I am once again hopeful that Democrats and Republicans can come together to accomplish meaningful things to help grow our economy. The truth is, the sensible center is not out of reach. We demonstrated that in recent days. And I believe we can demonstrate that again as we move forward.


Jacob J. Lew is the United States secretary of the Treasury.