White House says there's no wiggle room on Aug. 2 debt-ceiling deadline

There is no wiggle room around the Aug. 2 deadline for raising the debt ceiling, Office of Management and Budget Director Jack Lew said Tuesday.

"Aug. 2 is very real. And, you know, I think if you look at the markets, we've never predicted a day when things would change," Lew said on MSNBC.

ADVERTISEMENT
Lew said that markets also have indicated that lawmakers will reach a deal by the Aug. 2 deadline, when the Treasury Department projects the government will default unless it extends the debt ceiling.

"One thing is clear — if the markets believe that this is not going to get resolved, nobody should feel comfortable that they could live with the consequences of that," Lew said. "And I think that if you look at what the markets are telling us, they think we'll get our work done. We've always gotten it done before, and they believe we'll get it done now. If we don't, then I think one should not be comfortable with what comes next."

Some Republicans have charged that the Aug. 2 deadline to raise the debt ceiling is not, in fact, a real deadline, but merely a creation of Democrats and President Obama to argue in favor of passing a package to raise the debt ceiling and deficit-reduction package in early August.

"The deadline is not exactly what it's been portrayed to be," Rep. Mick Mulvaney (R-S.C.) said Tuesday on ABC. "That Aug. 2 deadline has been played up, I think, for political reasons more than anything else."

Several recent reports from financial institutions, including UBS, Barclays and Wells Fargo, have also cast doubt on the administration's insistence on an absolute Aug. 2 deadline. Analysts say that, because tax receipts have been higher than expected, Treasury has a lot of cash available and does, therefore, have some wiggle room. 

The White House has stressed though that the deadline is real and that legislators must come to an agreement and pass a ceiling increase to avoid default.

In the same interview, Lew stressed that there was no extra time at all, not even a few days.

"I know there are a lot of people outside trying to count the hour-to-hour and day-to-day cash flows. No one has come to me with any evidence that there is more room than August 2nd," Lew said.