Treasury secretary: Congress needs to raise the debt ceiling

Congress needs to raise the debt limit and take away the "cloud of uncertainty" about the U.S.'s ability to pay its bills, Treasury Secretary Jack Lew said in an interview broadcast Sunday.

"The fight over the debt limit in 2011 hurt the economy, even though, in the end, we saw an extension of the debt limit. We saw confidence fall, and it hurt the economy. Congress needs to do its job. It needs to finish its work on appropriation bills. It needs to pass a debt limit," Lew said on NBC television's "Meet The Press."

Senior lawmakers on Capitol Hill are trying to develop legislation to avoid a government shutdown after Sept. 30. At issue is what is normally routine: a plug-the-gap measure to fund the government for a few weeks or months until a deal can be worked out on appropriations bills giving federal agencies their operating budgets for the full 2014 fiscal year, which begins Oct. 1.

Some Democrats don't want to vote to continue to fund the government at new, lower levels mandated by the automatic, across-the-board spending cuts known as sequestration. And some conservatives are taking a last stand against President Obama's health care overhaul, the Affordable Care Act. Senate Democrats are also resistant to a $20 billion spending cut that Republicans say is absolutely necessary.

Lew maintains that the president won't negotiate over the debt limit.

"The mere fact of negotiating over the debt limit, after 2011, would introduce this notion that somehow there's a question about whether or not we're going to pay our bills, whether or not we're going to protect the full faith and credit of the United States," Lew said on ABC's "This Week with George Stephanopoulos."

"Well, it's not OK to default. Congress can't let us default.... They should get back after they take their time off in August and they should finish their work."

Lew, discussing the bankruptcy filing roiling Detroit, said no federal bailout is in the works for the motor city. When the secretary was pressed about why the government chose to bail out big banks, the auto industry and others, but isn't assisting the city, Lew said on CNN's "State of the Union" that the government has been giving Detroit technical advice and has made resources available to help take down blighted properties through federal programs.

Lew added that the situation in 2009-2010 that warranted the other bailouts was "unique," and that the problems Detroit has, "it's going to have to work out with its creditors."

Source: Associated Press