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Treasury Secretary: Debt Default Would Have Dire Consequences

Treasury Secretary Jack Lew testifies during a Senate Finance Committee hearing on Thursday.
Mark Wilson
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Getty Images
Treasury Secretary Jack Lew testifies during a Senate Finance Committee hearing on Thursday.

Treasury Secretary Jacob Lew urged lawmakers on Thursday to raise the government's borrowing limit or face the prospect of causing lasting damage to the U.S. economy.

In testimony before the Senate Finance Committee, Lew said that if Congress fails to meet its responsibility to raise the debt ceiling "it could deeply damage financial markets, the ongoing economic recovery, and the jobs and savings of millions of Americans."

"No Congress in 224 years of American history has allowed our country to default, and it's my sincere hope that this Congress will not be the first," he said.

He threw cold water on a GOP idea to prioritize payments in the short term in lieu of a debt-ceiling increase:

"Certain members of the House and Senate also believe that it's possible to protect our economy by simply paying only the interest on our debts while stopping or delaying payments on a number of our other legal commitments. How can the United States choose whether to send Social Security checks to seniors or pay benefits to veterans? How can the United States choose whether to provide children with food assistance or meet our obligations to Medicare providers?" he said.

Lew repeated the administration's demand that Congress pass legislation needed to end a partial government shutdown and raise the country's $16.7 trillion borrowing limit.

"The president remains willing to negotiate over the future direction of fiscal policy, but he will not negotiate over whether the United States should pay its bills," Lew said.

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Scott Neuman is a reporter and editor, working mainly on breaking news for NPR's digital and radio platforms.
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