Chamber economist to Congress: 'Do whatever is necessary' to avoid default

Washington policymakers should do everything in their power to ensure the federal government stays up and running during looming budget battles this fall, a leading economist said on Thursday. 

Martin Regalia, the U.S. Chamber of Commerce's chief economist, said Congress and the White House must keep the government open as they hammer out a deal to raise the nearly $17 trillion debt ceiling. 

"The is only one option and that is to do whatever is necessary to keep the U.S. government from defaulting," Regalia said during a Labor Day economic briefing. 

Pushing for a shutdown over short-term fiscal issues is not "really not an option," he said. 

"I'd love to see improvements in the long-run on debts and deficits, but you cannot fool around with the full faith and credit of the U.S. government."

Treasury Secretary Jack Lew said earlier this week that the debt ceiling would be hit in mid-October, giving lawmakers less than two months to deploy a compromise over several prickly issues. 

Regalia said he was surprised that the deadline didn't stretch further into the year considering the increased revenue stream from higher taxes and growing profits produced by government-controlled mortgage giants Fannie Mae and Freddie Mac. 

The White House reiterated that its stance on raising the debt limit is not up for debate.

Congress must also approve, at the very least, a short-term continuing resolution during its brief stay in Washington next month to keep the government running beyond Oct. 1, the start of the new fiscal year. 

Speaker John BoehnerJohn Andrew BoehnerRestoring fiscal sanity requires bipartisan courage GOP congressman slams primary rival for Ryan donations Speculation swirls about Kevin McCarthy’s future MORE (R-Ohio) has said in the past week that he is aiming to pass a measure that would keep the fund the government for a month or two while other matters are discussed.