By Peter Schroeder - 02/03/14 09:57 AM EST
Congress should move as fast as possible to increase the debt limit because the window for talks is so small, according to Treasury Secretary Jack Lew.
The president’s top economic adviser again urged lawmakers to boost the $16.7 trillion debt ceiling without delay, and without any policy concessions attached to it.
“The bottom line is, time is short. Congress needs to act to extend the borrowing authority for our nation and it needs to act now,” he said Monday at the Bipartisan Policy Center.
“It would be a mistake to wait until the eleventh hour to get it done,” he added.
“The president has made it clear time and time again, that neither he nor any president should have to pay a ransom,” he said.
House Republicans have been huddling to come up with a strategy on the debt limit. GOP lawmakers look to be eyeing much smaller concessions than they have in the past, such as a repeal of a temporary pool of money to help health insurers cover the cost of having to now cover riskier patients. Republicans have decried that part of ObamaCare as an insurer "bailout."
But while that provision is significantly smaller than the dollar-for-dollar demands in spending cuts that Republicans used to tie to the debt limit, the White House is still sticking with its stance that nothing but a "clean" debt-limit increase free of extra provisions is acceptable.
The debt limit, temporarily suspended as part of the October deal to end the government shutdown, is set to be hit on Feb. 7. At that point, the Treasury will deploy its “extraordinary measures” to free up cash to keep paying bills. But while those measures have bought months of extra time in the past, this time Lew believes they will only work until the end of the month.
After that, Lew said the government will be left with just its cash on hand and incoming revenue to keep paying its bills, and he emphasized that it won’t take long for the government to not have enough money to meet all its obligations.
That’s because the government typically sends out more money than it takes in in February as it begins paying out tax refunds.
“At some point very soon, it would not be possible to meet all the obligations of the federal government,” he warned. “It’s imperative that Congress move right away.”
Republicans have complained about the administration’s rigid stance that it will not accept any provisions attached to a debt-ceiling increase. They point to a host of broad fiscal reforms passed by both parties that included a borrowing boost as part of it.
But Lew contended that the debt-limit standoff of 2011, which ultimately led to the first-ever downgrade of the nation’s credit rating, justified this hard-line stance.
“We had never been seen the argument made that, quote, if I don’t get my way, we’ll default,” he said. “The president had to take a firm position that that could not be the way we dealt with it.”