[Editor’s note: the following is a crosspost by Lawrence Delevingne that originally appeared on CNBC.com]:
Treasury Secretary Jack Lew said Republicans aren’t working fast enough to extend the debt limit — and the consequences of inaction are dire.
“If you look at the calm out there, which I think is a bit greater than it should be, there’s a sense that 2011 was a terrible experience and nobody would do that again,” Lew said Tuesday at the Bloomberg Markets 50 conference in New York. “People have to take seriously the fact that Congress has a lot of work to do in a short period of time and the consequences of their failure are very substantial.”
Lew also said the U.S. is almost out of money, and said in a letter to Congress Wednesday that Oct. 17 is the likely deadline when “extraordinary measures” will run out.
“It will be the middle of October when we are left with just cash–no more ability to go out and borrow unless Congress acts,” Lew said at the conference.
He noted the amount of cash would be about $30 billion—less than a day’s worth of expenditures. He had previously indicated there would be at least $50 billion.
Lew repeated his hard line that President Barack Obama “will not and should not” negotiate with the GOP. He said Republicans were willing to default and therefore should not be negotiated with as that is not an option.
“There is no good alternative,” Lew said of not adding to the amount the government can borrow.
Lew was asked why Obama negotiated on the issue in 2011 but won’t now.
He said it was “not a good experience” to go “right to the brink of default.” Markets reacted with high volatility, and Standard & Poor’s downgraded the country’s credit rating from AAA—the strongest possible—to AA+.
“We saw real damage to the U.S. economy, even though we ended up with a deal at the eleventh hour,” Lew said. “We shouldn’t do that again.”
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