Speaking at a Bloomberg event in New York City on Tuesday afternoon, Lew said that investors' confidence that Congress would strike a deal to lift the debt ceiling and avoid a default is “greater than it should be.”
Lew also warned that revenues were coming in slower than expected, meaning that the Treasury is exhausting its resources faster than it was a few weeks ago, when he told Congress that the Treasury would be down to just $50 billion in cash on hand by mid-October.
“Because things have come in a little bit slower – it’s not something that would matter if we weren’t in this kind of ridiculous position of looking to see how long you can operate on the cash that’s left – it’s less than 50 now,” Lew said.
Lew appears worried that Congress’ brush with the debt limit in 2011 has desensitized investors to the dangers of coming close to the edge again this fall. A week ago, Lew said that he was “cautious and anxious” about a possible debt default at an event in Washington.
On Tuesday, Lew warned against complacency and begged Congress for “no more self-inflicted wounds,” saying that the 2011 episode hurt consumer and business confidence even though default was avoided.