On “Fox News Sunday,” Treasury Sec. Jacob Lew defended fear mongering over the debt ceiling if Congress fails to increase the federal debt limit, such as his assertion that the economic impact would be “catastrophic.” Unfortunately for his credibility, he did not provide specific examples, opting instead to continue fear mongering by saying that Congress blowing the Oct. 17 debt-limit deadline would be “reckless.”
“The consequences are immediate and very bad,” Lew said. “The direction is bad. There is a range of how bad.”
Lew added that the White House is willing to negotiate on fiscal issues, despite the reality that President Obama repeatedly said he refuses to negotiate as part of a debt-ceiling deal.
“The president has been and continues to be open to negotiations,” he said, contradicting statements Obama has made for months.
Just five days earlier, Obama said, “Let me repeat, I will not negotiate over Congress’ responsibility to pay bills it has racked up.”
House Speaker John Boehner said on ABC’s “This Week” on Sunday, “I don’t want the United States to default on the debt. But I’m not going to raise the debt limit without a serious conversation.”
The Obama administration’s repeated fear tactics over the so-called catastrophic economic impact of the United States defaulting on its debt, have so far had little effect on world financial markets. The reason may just be simple, at least for now, the markets know that the Unites States receives sufficient monthly revenue to pay its bills — period.
In fact, the entire idea of a default is fundamentally untrue, and the U.S. Treasury is taking in more revenue in raw numbers than ever before in U.S. history.
Yet, Lew said on Sunday that by Oct. 17 (at or around anyway) he will lose the capacity to borrow, because he will have exhausted all the “extraordinary measures” he has been using since May to free up room for more borrowing, which is racking up U.S. debt. He also said the government has never before lost its borrowing ability.
Entitlement reform, the Keystone XL pipeline, ObamaCare and changing the tax code are among the fiscal issues said to be potential Republican negotiating pieces, which they could try to link to the debt-ceiling talks. The strategy will become clearer when both sides reach a spending deal to end the partial government shutdown that started Tuesday. But Boehner has made comments suggesting House Republican leadership is leaning toward wrapping the deal up into one.
The federal government’s borrowing limit is now at $16.7 trillion — officially — with upwards of $90 trillion in unfunded entitlement liabilities.