Treasury Secretary Jack Lew says there isn't much time. Congress and the White House face two big deadlines to fund the government. It will be an intricate maneuver to meet both deadlines even as congressional leadership changes. And in an interview with NPR, Lew described behind-the-scenes negotiations meant to avert a last-minute crisis.
"There are conversations going on at a staff level," Lew told NPR's Steve Inskeep, "and I think the key is for Democrats and Republicans [in Congress] to talk to each other."
From his office at the Treasury Department, Lew commented on the challenge of doing what should be the routine business of government. A Congress that was never designed to act quickly, and that's been made dysfunctional by partisanship, must resolve multiple problems within weeks.
House Speaker John Boehner retires at the end of October; Republicans are voting today on his successor. By Nov. 5, Lew says, Congress must raise the federal debt limit to allow the government to meet its obligations. Then in December comes a deadline to approve spending and avert a government shutdown.
Lew insists the administration will not negotiate over the debt limit. "We have made it clear that we are not going to let the debt ceiling be used as a way to extract commitments that otherwise would be unacceptable."
Yet Lew acknowledged that there is a larger conversation underway about measures that could address both the borrowing and spending deadlines, and possibly pass before Speaker Boehner steps down.
Negotiators are trying to hammer out something substantive to change the so-called sequester, a series of across-the-board defense and spending cuts put in place in recent years.
With Boehner exiting, there's the potential for a longer-term budget deal, possibly two years, that could be passed with Democratic support. Neither Boehner nor Republican Senate Majority Leader Mitch McConnell has shown any interest in another government shutdown over the debt limit. Boehner has also promised to "clean the barn" before he leaves.
Lew's comments come as House Republicans are set to vote to pick their nominee to be replace Boehner.
White House officials say there are open lines of communication and point to "shared goals." Lew was also echoing some of what President Obama said at a press conference Friday.
"When it comes to the debt ceiling, we're not going back there," Obama said. But, the president added, "I do think there is still a path for us to come up with a reasonable agreement that raises the spending caps above sequester to make sure that we can properly finance both our defense and nondefense needs, that maintains a prudent control of our deficits, and that we can do that in short order."
Obama also acknowledged his conversations with congressional leaders.
"We've always said if it's easier to combine it with something else that's mutually acceptable, that's a form question," Lew said, adding, "that's for Congress to decide. We've told them they need to raise the debt limit. If combining a couple of things together that are on their way towards approval makes it easier — what they can't do is, it can't be used to extract an unacceptable policy commitment."
The debt ceiling has been routinely raised in the past — that is, until the 2010 wave election that saw Republicans take over the U.S. House fueled by an influx of Tea Party candidates. The Tea Party has made the national debt, which is now more than $18 trillion, a key part of its platform. In 2011 and 2013, Tea Party members' push to cut spending rather than raise the debt limit pushed the country to the brink of default.
Negotiations on major spending reform in 2011 between Obama and Boehner failed, and then, in 2013, the fight over the debt limit led to a partial government shutdown.
Treasury warned that the country was within a day of not being able to make its debt payments, and to reopen the government, Boehner resorted to relying on Democratic votes, an unusual maneuver for the majority.
There's motivation from both sides this time around in getting a deal done, in large measure, because the future appears so unpredictable. With Boehner gone, there's no telling what the strategy will be of the new House Republican leadership team that is not even in place yet.
"Getting to the day before we can't pay our bills, the day before the government of the United States might default for the first time in its history," Lew told NPR, "we shouldn't get even close to it. So the notion that the deadline is the last possible moment to act is a mistake. And it's a mistake which Congress should avoid."
More from Lew:
On what tools Treasury is trying to use to help create jobs and raise wages
"We're continuing to advocate doing something like combining business tax reform with infrastructure to use the one-time revenue that comes from business tax reform to have a big increase in our infrastructure investment. So I think some of the solutions are quite clear, if we could only get the political process to produce them."
On what changes could come to the $10 bill
"What I announced was we were going to be putting out a whole new family of bills, not just the $10 bill, but we're going to be redesigning the other bills in this new series. And I said that there is potentially going to be a number of changes. So I would just invite you to stay tuned and in the end see whether we keep the commitment I made to continue to honor both a woman and Alexander Hamilton and our history of democracy."
On whether the U.S. could expect multiple women on U.S. currency
"What I would say is that everyone is focused on one square inch of the bill. There's two whole sides to a bill. And there is a lot of space to tell a lot of stories."
STEVE INSKEEP, HOST:
We have a picture this morning of quiet talks to avoid a federal fiscal disaster. It comes from President Obama's treasury secretary, Jack Lew. The administration and Congress hope to manage two looming deadlines to do the government's business.
SEC OF THE TREASURY JACK LEW: There are conversations going on at a staff level. And I think the key is for Democrats and Republicans on the Hill to talk to each other.
INSKEEP: Lew says there's not much time for talking. House Speaker John Boehner is retiring. Republicans vote on a successor today. And Boehner goes away in a few weeks. Days after that transition, Congress must raise the federal debt limit. Weeks after that, Congress must pass a bill to keep the government running. We discussed the deadlines and more in the treasury secretary's corner office. An enormous painting hangs on the wall of the first treasury secretary, Alexander Hamilton, who established the government's credit in the 1700s. In 2015, Secretary Lew hopes to avoid a last-minute confrontation with Republicans in Congress.
How great a risk is it that the deadlines will be blown?
LEW: Look, Steve, there is no reason for either deadline to be blown. The Congress needs to finish the work to get the United States government funded for the year. And it has to act on the debt limit and make sure that we can meet the obligations that have already been committed to. You know, one of the things about the debt limit that people don't always know is that it doesn't actually authorize any new spending. It just permits you to pay the bills that have previously been committed to. And the United States, for its entire history, has always kept its obligations. And Congress has to make sure that that remains the case. And they don't have that much time. I wrote a letter to Congress last week informing them that the extraordinary measures that we have to extend the period before they act will run out no later than November 5. And I actually indicated in the letter that it could even be a little sooner than that. So they only have a few weeks. They need to act. There's no reason to leave either funding the government or making sure that we can pay our bills until the last minute.
INSKEEP: I want to remind people, in 2011 you attempted to negotiate with Congress, the administration did, over the debt ceiling. It was a political disaster. In later years, the administration refused to negotiate and insisted on a clean debt ceiling passage. Congress ultimately did that. This time, you're negotiating again. Is that correct?
LEW: No, we've made it clear that we are not going to let the debt ceiling be used as a way to extract commitments that otherwise would be unacceptable. You know, we've always said if it's easier to combine it with something else that's mutually acceptable, that's a form question.
INSKEEP: And that's what you're doing?
LEW: No, that's for the Congress to decide. We've told them they need to raise the debt limit. If combining a couple of things together that are on their way towards approval...
INSKEEP: Like the budget?
LEW: Makes it easier... Or - I'm not going to fill in the blank. They have to fill in the blank. What they can't do is it can't be used to extract an unacceptable policy commitment.
INSKEEP: I know that Republican leaders would like to get this done while Speaker Boehner is still there. He'd like to get it done before he leaves. There's fear that it might be difficult afterward. Speaking yourself as someone who has worked in Congress, who knows it very well, what are the odds that Congress is ever going to finish something early in that way?
LEW: I think that with regard to the debt limit, finishing it by the end of October is none too early. If you just think back to 2013 and 2011, getting to the day before the government of the United States might default for the first time in its history - we shouldn't get even close to it.
INSKEEP: Setting that aside, what are the major risks that you see to the United States economy and the global economy in the next few years?
LEW: So look, I think the United States economy is in a pretty strong place right now. We've seen, as we've recovered from the worst recession since the Great Depression, a sustained period of growth in jobs, stable growth in the economy. We still have work to do. We still have issues in terms of making sure that working families have the wages that really support a middle-class life. But the economic recovery growth in the United States is stable and strong. When I look outside of the United States, you know, the global economy could use a little bit of a boost.
INSKEEP: You mentioned more than once, Mr. Secretary, your concern about wages and middle-class jobs. I'll just note that median wages in the United States are still below what they were in 2008, just before the recession hit. Aren't you more than a little frustrated that six and a half years into this administration, that would still be the case?
LEW: You know, the depth of the recession when we took over was even worse than any of us knew at the time. As the data got more and more clear over the first few years of this administration, it was evident that, you know, we had taken an enormous amount of economic pain. And I think the fact that we've now seen over 13 million jobs created, that we have an unemployment rate that's gone from 10 percent to 5.1...
INSKEEP: A lot of jobs but lower wages.
LEW: And we're seeing some growth in wages. That is one of the things that we cannot kind of rest comfortably until we've made more progress on.
INSKEEP: Is there one large tool in your toolbox that you think you could use to affect that?
LEW: You know there are actually quite a number of things that I think we know we could do to have the economy grow in a way that would create more middle-class jobs. Why do we talk about infrastructure so much? Infrastructure serves multiple purposes. First of all, to have a strong economy in the future, you need to have the roads, the ports, the airports to carry commerce and people efficiently. We're not going to have that if we don't invest. When you invest in infrastructure, what you're creating are good, middle-class jobs building roads, ports and airports. So you're accomplishing short-term benefits and long-term benefits. There is, I think, broad bipartisan agreement that that's the kind of thing we need more of in this country. But our political process has not given us a pathway forward to make the kind of investment that we need. We're going to continue to work towards it. We're going to continue to advocate doing something like combining business tax reform with infrastructure to use the one-time revenue that comes from business tax reform to have a big increase in our infrastructure investment. So I think some of the solutions are quite clear if we could only get the political process to produce them.
INSKEEP: That's Treasury Secretary Jack Lew. Transcript provided by NPR, Copyright NPR.