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POLITICS: PennAve

Treasury Secretary Jack Lew challenges GOP over upcoming fiscal fights

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Treasury,Federal Budget,Debt Ceiling,PennAve,Joseph Lawler,Analysis,Budgets and Deficits,Jack Lew

Treasury Secretary Jack Lew took to the Sunday morning talk shows to help the Obama administration establish a stronger negotiating position for upcoming fiscal debates with congressional Republicans, saying that the administration would not negotiate over the nation's debt ceiling

Lew told Fox News Sunday that it was a “mistake” to bargain with the GOP in 2011 over raising the debt ceiling, the nation's borrowing limit which, if not increased, would prevent the federal government from paying its obligations for the first time.

"We cannot negotiate whether the U.S. will pay its bills,” he said.

Republicans are demanding further cuts to government spending in exchange for authorizing an increase in the amount of debt the federal government is legally allowed to accrue. The federal government is currently operating at its $16 trillion debt limit, and the Bipartisan Policy Center estimates that it will exhaust its abilities to meet its obligations without issuing new debt in late October or November.

“We’re not going to raise the debt ceiling without real cuts in spending. It’s as simple as that,” House Speaker John Boehner, R-Ohio, said last week.

Boehner suggested that the GOP would again seek cuts equal to the amount by which the ceiling was raised, as the party did in 2011.

Lew, however, reaffirmed the message that President Obama and Senate Majority Leader Harry Reid, D-Nev., have already sent the GOP: Democrats are not bowing to Republicans’ demands this time.

The White House noted that the economy suffered two years ago as a result of political maneuvering over the debt ceiling, which until recent years was always renewed with bipartisan support and little debate.

“Things have changed since 2011,” Lew said.

Lew also aggressively pushed back against Republicans’ demands to replace the sequester, the across-the-board spending cuts mandated by the debt ceiling deal struck in 2011. The cuts took effect in March.

Lew warned the GOP that it cannot “steal from domestic priorities” to replace the defense spending cut under the sequester.

Lew stopped short of declaring that any Republican bill further cutting spending would be vetoed by President Obama, but insisted that the GOP would not be allowed to dictate the terms of the debt ceiling deal.

“Congress has to write bills that meet the challenge the president set forward,” he said. ”We need to focus on growth…you cannot just cut your way to growth."

Instead of deeper cuts, Obama is proposing new spending on programs aimed at improving the nation’s infrastructure and education policies.

Lew also cited the decreasing size of the federal government’s budget deficit as a point in the administration’s favor. “We are reducing the deficit at the fastest rate since the demobilization after World War II,” he said.

“We’ve actually accomplished the amount of deficit reduction we said we’d do,” Lew said, arguing that the debate is now over the “composition” of spending cuts and tax hikes.

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Joseph Lawler

Economics Writer
The Washington Examiner