Warren: GOP notion that default won’t hurt is a ‘fantasy’

Lawmakers are at an impasse on how to pass a continuing resolution (CR) to fund the government, which has been shut down for a week. They are also working against an Oct. 17 deadline for raising the nation's borrowing limit. 

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Treasury and the White House have warned that if the limit is not lifted, the government could default on its debt, leading to a recession. 

“Congress told the government to spend more money than we had … but now Congress is threatening to run out on the bill,” Warren said. “If that strikes you as bizarre, it is.”

But some Republicans, such as Sen. Rand Paul (R-Ky.), have said the credit limit doesn’t need to be raised because enough revenue is generate to pay the interest on U.S. debt.

Warren said a U.S. default could bring on a “world-wide recession.”

“We can make a mistake and then back up and fix it,” Warren said. “A default on our national debt is not one of those things. … We are playing with the lives of every American.”

House Republicans have demanded that repealing parts of ObamaCare be included in a debt ceiling increase and Senate Republicans have called for major entitlement reform to reduce spending. President Obama has demanded that Congress sent him a "clean" debt ceiling increase.

It's unclear where the fight will go from here as each side becomes more entrenched.