Economy

U.S. Treasury Secretary Lew warns default will affect all Americans

Jack Lew

Jack Lew

U.S. Treasury Secretary Jack Lew said last week that failure by Congress to raise the debt ceiling will affect all Americans, including seniors, veterans and children who rely on government programs.

“If the United States cannot pay its bills in full and on time, each and every American will be affected, including seniors who rely on Social Security, veterans who depend on disability payments, children in need of food assistance and doctors and hospitals who treat Medicare patients, among others,” Lew said.

The debt ceiling is a limit of allowable federal debt that is currently set at $16.7 trillion, which the government is expected to reach by or on Oct. 17.

President Obama has said he would not negotiate on raising the debt ceiling, a move that conservative Republicans in Congress have resisted unless Obamacare is delayed or defunded and budget concessions are made, Reuters reports.

Lew warned, however, of the dangers of failing to raise the debt, adding that an increase in the debt limit does not provide the government with the ability to spend more.

“An increase in the debt limit simply allows us to pay our bills,” Lew said. “Without a debt limit increase, our government will – in a matter of days – not have the resources it needs to make good on its commitments. Only Congress has the power to lift the debt limit. That means only Congress can clear the way for our government to meet all of its financial obligations.”

Lew also pointed to calls by some lawmakers to let the U.S. default on its debt, with the rationale that the government could pay some of its bills and let others go unpaid.

“The United States cannot be put in a position of having to choose which commitments it should meet,” Lew said. “How could we possibly decide among supporting our veterans, maintaining food assistance for children in need, or sending Medicare payments to hospitals?”

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