Treasury Secretary Lew hammers on Congress to raise debt ceiling

WASHINGTON, Sept. 17 (UPI) -- U.S. Treasury Secretary Jacob Lew Tuesday said the country cannot afford a second debt ceiling standoff, like it saw in the summer of 2011.

Speaking before the Economic Club in Washington, Lew said raising the federal debt ceiling "as soon as possible" was necessary to "eliminate any uncertainty about America's ability to pay its bills."

Raising the debt ceiling has to do with paying bills that have "already been incurred," he said.

"No credible economist or business leader thinks that defaulting on the full faith and credit of the United States is good for job creation or economic growth. They understand that Congress choosing not to pay the government's bills is unacceptable, and could hurt our economy," Lew said, noting that even flirting with the deadline for raising the debt ceiling could be dangerous.

"For one, it is not possible for the U.S. Treasury to know with precision when that moment will be because outgoing payments and incoming receipts vary significantly each day. Operating on a small cash balance creates the real danger that on a day that we anticipate having a positive cash balance we will actually have a negative one," he warned.

Lew has warned Congress that it has until the middle of October to raise the debt ceiling or the government could fail to meet Medicare and Social Security obligations, as well as fail to cover private contracts and pay owed to military personnel.

In the summer of 2011, Republicans held back on approving a higher debt ceiling in an effort to turn the focus to lowering federal debt.

The standoff led to the first ever downgrade of the U.S. credit rating, which jolted stock markets.

Credit rating firm Standard & Poor's in August 2011 dropped the U.S. rating from AAA, its top level, to AA +.