This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/world/2014/feb/03/treasury-secretary-jack-lew-debt-ceiling

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Treasury secretary Jack Lew demands action on debt ceiling 'very soon' Treasury secretary Jack Lew demands action on debt ceiling 'very soon'
(7 months later)
The treasury secretary, Jack Lew, said on Monday the US government’s borrowing limit should be extended as a matter of urgency, warning that the country will be unable to meet its debt obligations “at some point very soon”, possibly by the end of the month.The treasury secretary, Jack Lew, said on Monday the US government’s borrowing limit should be extended as a matter of urgency, warning that the country will be unable to meet its debt obligations “at some point very soon”, possibly by the end of the month.
Conservative figures in the Republican-controlled House of Representatives are braying for a confrontation over the debt limit, as a way of prising unspecified concessions out of President Barack Obama’s administration. Obama is refusing to negotiate, saying he will not yield to heavy-handed tactics which could risk a calamitous US debt default.Conservative figures in the Republican-controlled House of Representatives are braying for a confrontation over the debt limit, as a way of prising unspecified concessions out of President Barack Obama’s administration. Obama is refusing to negotiate, saying he will not yield to heavy-handed tactics which could risk a calamitous US debt default.
On Monday, Lew said the Treasury’s borrowing capacity would expire “ in just a matter of days”, after which he would be required to use extraordinary measures to enable the government to meet its obligations.On Monday, Lew said the Treasury’s borrowing capacity would expire “ in just a matter of days”, after which he would be required to use extraordinary measures to enable the government to meet its obligations.
However, Lew said, complex seasonal factors mean such measures will not last as long as they might do at other times of the year. “We now forecast that we are likely to exhaust these measures by the end of this month,” he said.However, Lew said, complex seasonal factors mean such measures will not last as long as they might do at other times of the year. “We now forecast that we are likely to exhaust these measures by the end of this month,” he said.
“It is imperative that Congress move right away to increase our borrowing authority,” he added. “It would be a mistake to wait until the 11th hour to get this done.”“It is imperative that Congress move right away to increase our borrowing authority,” he added. “It would be a mistake to wait until the 11th hour to get this done.”
Lew’s remarks, delivered at the Bipartisan Policy Center, were the latest salvo in what has become something of a rhetorical ritual Washington. Both parties have historically refused to raise the Treasury’s borrowing ceiling – which should be a routine manoeuvre – unless they secure concessions. It has led to jockeying and brinkmanship in the run-up the Treasury's deadline, although Congress has always, in the end, raised the ceiling.Lew’s remarks, delivered at the Bipartisan Policy Center, were the latest salvo in what has become something of a rhetorical ritual Washington. Both parties have historically refused to raise the Treasury’s borrowing ceiling – which should be a routine manoeuvre – unless they secure concessions. It has led to jockeying and brinkmanship in the run-up the Treasury's deadline, although Congress has always, in the end, raised the ceiling.
Such fights are the result of a historical quirk which requires Congress intermittently to raise the government’s borrowing authority, even though lawmakers have already approved budgets and spending amounts. Such fights are the result of a historical quirk which requires Congress intermittently to raise the government’s borrowing authority, even though lawmakers have already approved budgets and spending amounts.
Although most economists believe the risk of a deliberate default instigated by Congress is extremely slow, markets can easily be destabilised by the threat of US failing to meet its creditors.Although most economists believe the risk of a deliberate default instigated by Congress is extremely slow, markets can easily be destabilised by the threat of US failing to meet its creditors.
The debt ceiling crisis in 2011, in which Republicans demanded spending cuts in return for increasing the ceiling, prompted a volatile reaction in the markets and contributed to the first downgrade in the credit rating of the US government in history. A similar crisis in October 2013, linked to the Republican-induced government shutdown, was only averted when Congress passed a resolution postponing the debt limit until February 2014.The debt ceiling crisis in 2011, in which Republicans demanded spending cuts in return for increasing the ceiling, prompted a volatile reaction in the markets and contributed to the first downgrade in the credit rating of the US government in history. A similar crisis in October 2013, linked to the Republican-induced government shutdown, was only averted when Congress passed a resolution postponing the debt limit until February 2014.
The debate over what to do next is gathering pace in Washington. Republican leaders are exhibiting little appetite for another showdown, although they have kept their powder dry by refusing to rule one out.The debate over what to do next is gathering pace in Washington. Republican leaders are exhibiting little appetite for another showdown, although they have kept their powder dry by refusing to rule one out.
October’s shutdown damaged the GOP's standing in opinion polls, compounding the party's reputation for obstructionism. Senior Republicans fear that another high-stakes confrontation could count against them in November’s midterm elections.October’s shutdown damaged the GOP's standing in opinion polls, compounding the party's reputation for obstructionism. Senior Republicans fear that another high-stakes confrontation could count against them in November’s midterm elections.
“We know what the obstacles are that we face, but we believe that defaulting on our debt is the wrong thing,” John Boehner, the Republican speaker of the House, said on Thursday. “We don’t want to do that.”“We know what the obstacles are that we face, but we believe that defaulting on our debt is the wrong thing,” John Boehner, the Republican speaker of the House, said on Thursday. “We don’t want to do that.”
Republican leaders are attempting to redefine the party’s image ahead of the elections, emphasising their desire to work constructively with Democrats and the White House. Paul Ryan, the influential GOP congressman from Wisconsin, has in recent days appeared to row back from hints of another debt ceiling showdown.Republican leaders are attempting to redefine the party’s image ahead of the elections, emphasising their desire to work constructively with Democrats and the White House. Paul Ryan, the influential GOP congressman from Wisconsin, has in recent days appeared to row back from hints of another debt ceiling showdown.
However it remains to be seen whether a majority of House Republicans will pass a so-called “clean” debt ceiling bill – one that has no policy concessions attached – which many would regard as a defeat. However it remains to be seen whether a majority of House Republicans will pass a so-called “clean” debt ceiling bill – one that has no policy concessions attached – which many would regard as a defeat.
Asked about a debt limit confrontation at a Republican retreat on Thursday, Steve Scalise, the chair of the GOP study committee, told reporters: "Reforms that control Washington spending always have been part of the discussion when it comes to the debt ceiling.”Asked about a debt limit confrontation at a Republican retreat on Thursday, Steve Scalise, the chair of the GOP study committee, told reporters: "Reforms that control Washington spending always have been part of the discussion when it comes to the debt ceiling.”
Ted Cruz, the Texas senator who is an inspiration to many Tea Party-aligned congressmen, is calling on his party to take an aggressive stance. “We should not raise the debt ceiling without significant structural reforms that address the out of control spending and out of control debt in Washington,” he told a Bloomberg breakfast last week.Ted Cruz, the Texas senator who is an inspiration to many Tea Party-aligned congressmen, is calling on his party to take an aggressive stance. “We should not raise the debt ceiling without significant structural reforms that address the out of control spending and out of control debt in Washington,” he told a Bloomberg breakfast last week.
“The debt ceiling is the natural lever point to address the out-of-control spending and debt. It has historically been the most effective lever point to doing so,” he said.“The debt ceiling is the natural lever point to address the out-of-control spending and debt. It has historically been the most effective lever point to doing so,” he said.
Tony Fratto, a former Treasury and White House communications official in the George W Bush administration, disputed that. He said his experience of negotiations, with both Democrats and Republicans, was that demands made were “not on serious issues” relating to spending. Tony Fratto, a former Treasury and White House communications official in the George W Bush administration, disputed that. He said his experience of negotiations, with both Democrats and Republicans, was that demands made were “not on serious issues” relating to spending.
“It was a member of Congress wanting to get someone on a board or a commission,” he recalled. “Another member of Congress wanted to get a promise that we would agree to send someone up to a hearing on Cuba policy.”“It was a member of Congress wanting to get someone on a board or a commission,” he recalled. “Another member of Congress wanted to get a promise that we would agree to send someone up to a hearing on Cuba policy.”
Fratto said he was “envious” of the stance now being adopted by the White House which, he said, recognised that Congress would never actually see through its threat of pushing the US economy off a cliff.Fratto said he was “envious” of the stance now being adopted by the White House which, he said, recognised that Congress would never actually see through its threat of pushing the US economy off a cliff.
“What [the debt limit fight] has really become is an abuse on the part of the legislative branch, against the executive," he said. "The executive has finally realised that it can just take a step back from the line and say, no, we’re not going to to allow ourselves to be extorted.”“What [the debt limit fight] has really become is an abuse on the part of the legislative branch, against the executive," he said. "The executive has finally realised that it can just take a step back from the line and say, no, we’re not going to to allow ourselves to be extorted.”