POLITICS: PennAve

Jack Lew on the debt ceiling crisis: This can never happen again

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Treasury,Fiscal Policy,Debt Ceiling,PennAve,Joseph Lawler,Economy,Jack Lew

A debt ceiling standoff "can never happen again," warns Treasury Secretary Jack Lew.

Speaking with David Gregory of NBC's "Meet the Press" the Friday after President Obama signed a bill lifting the debt limit and reopening the government, Lew called the standoff that preceded the vote to raise the debt ceiling "a little bit scary because it got so close to the edge."

Nevertheless, Lew is relatively sanguine about the health of the U.S. economy, even as a series of further budget showdowns are scheduled for upcoming weeks, including another vote to raise the debt ceiling sometime beginning in February of next year.

When prompted by Gregory, Lew declined to assign a dollar value to the damage created by the debt ceiling impasse, instead saying "I know the direction. The direction is that it took an economy that is fighting hard to get good economic growth going to create jobs for the American people, and it took it in the wrong direction."

Other Democrats have seized on a report from the ratings agency that estimated the total loss of economic output from the standoff to be $24 billion. Lew acknowledged that the debt limit fight might have temporarily raised borrowing costs and that the shutdown may have reduced consumer spending, and said that Treasury officials would study what happened over the past few weeks, but avoided quantifying the impact of the crisis.

"What we just went through was a political crisis, not an economic crisis," said Lew. "And I think that having come through it, what we saw on Wednesday night, that admittedly, at the 11th hour a strong bipartisan majority in the House and the Senate stood for the principle that is so important that you cannot take a risk with the full faith and credit of the United States."

"I think that the message that we have to send going forward is that there was a turning point on Wednesday night, and this won't happen again; it can't happen again," Lew added.

Lew expressed hope that the government's focus would "shift the focus from just fiscal policy" to some of the president's priorities for aiding economic growth, including infrastructure, the farm bill, and immigration reform.

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