Jack Lew, the US Treasury secretary, delivered his most extensive
warning yet to Congress about the dangers of brinkmanship over the US
debt ceiling, saying it would inflict broad damage to the economy in an
"unnecessary self-inflicted wound".On a visit to Mountain View,
California, in the heart of Silicon Valley, Mr Lew did not offer an
exact deadline by when US lawmakers will need to strike a deal to raise
America's borrowing limit or face default. But analysts at the
Bipartisan Policy Center, a think-tank, believe it will be somewhere
between mid-October and mid-November, depending on the government's cash
flow.
In his speech, Mr Lew harked back to the "cloud of doubt"
that enveloped the US economy two years ago when Congress and the White
House only reached a debt ceiling deal at the eleventh hour after weeks
of protracted, tense negotiations."The drawn-out dispute over the debt
ceiling caused business uncertainty to jump, consumer confidence to
drop, financial markets to fall, and economic growth to falter," Mr Lew
said. "We cannot afford a repeat of what happened in 2011," he added.Mr
Lew has cited the risk of another brush with default in the past, but
Thursday's remarks were the most pointed and lengthy on the subject
since he took the helm of the Treasury in February.
His comments
came with Congress still on summer recess, but facing a gruelling set of
high-stakes fiscal negotiations when it returns next month.In 2011,
Republicans in the House sought to link raising the debt limit with deep
spending cuts that Democrats and the White House found hard to stomach.
But this year, they are also trying to extract concessions on
"Obamacare" – the 2010 health reform law.The attempt by some staunch
conservatives to "defund" the law has been discouraged by Republican
leaders but there is another idea gaining traction.A top Republican aide
said the party was toying with the idea of demanding a one-year delay
in the "individual mandate" that will require every American to be
insured by the end of next year or face a tax penalty.
This is my favorite article:The Supreme Court has so far sent the cases back to Posner
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