White House budget director sees progress in debt-ceiling talks

An Obama administration official said Sunday morning that while a deal hasn't been struck by congressional leaders and the White House, progress is being made.

Jack LewJack LewOne year later, the Iran nuclear deal is a success by any measure Chinese President Xi says a trade war hurts the US and China Overnight Finance: Price puts stock trading law in spotlight | Lingering questions on Trump biz plan | Sanders, Education pick tangle over college costs MORE, White House budget director, said progress is reflected in increased activity in talks between Senate Minority Leader Mitch McConnellMitch McConnellOvernight Finance: Trump takes US out of Pacific trade deal | WH says Trump has left his businesses | Lobbyists expect boom times McConnell to Dems: Work with us on GOP's 'formidable' challenges McCain: Trump's withdrawal from TPP a 'serious mistake' MORE (R-Ky.) and Senate Majority Leader Harry ReidHarry ReidFranken emerges as liberal force in hearings GOP eyes new push to break up California court The DC bubble is strangling the DNC MORE (D-Nev.), as well as a realization by most lawmakers that a debt-ceiling increase must happen before Aug. 2.

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"It's not insignificant that all leaders understand that it would be irresponsible to get to Aug. 2 and not extend the ability of the United States to pay its debt," Lew said on CNN's State of the Union.

He said most lawmakers are on board and understand the need to raise the debt ceiling, although there will be a "fringe that believes that playing with Armageddon is a good idea, but I don't think that's where the majority will be."

"We have to make sure that at a minimum Congress has a way to take action and avoid default on the U.S. debt," Lew said.

"We have to avoid the kind of chaos that would result from default."

Lew said he didn't know when the next meeting would take place between the White House and congressional leaders.

Despite the stalemate between Democrats and Republicans on an agreement that would cut spending, reduce the deficit and raise the debt ceiling, Lew expressed confidence in Washington leadership to take action before the deadline.

Without an increase in the debt ceiling, the nation risks a quick rise in interest rates, another hit to the already slowing economic recovery and "chaos" in U.S. and world markets.

"It's not an option," he said.

He reiterated that the administration doesn't have any payment priority plans if the nation goes into default.

Getting into the business about setting spending priorities "misses the fundamental question, which is it's unacceptable for the United States to be in a place where its a Social Security recipient or a soldier or someone owed money by the government can't be paid because we haven't done our job," he said.

"We're ready to deal with whatever happens, but the truth is this is a different situation than the United States has ever faced where we couldn't pay our bills."