Treasury: Another delay in raising debt limit could harm economy

WASHINGTON, Sept. 25 (UPI) -- House delays on raising the federal debt limit could cause more harm to the U.S. economy than the 2011 impasse, the secretary of the treasury said Wednesday.

In a letter to Speaker John Boehner, Treasury Secretary Jake Lew called on members of the lower chamber to "act immediately" to extend the amount of money the government can borrow to pay its bills.

Should the House repeat its "brinksmanship" of 2011, when it waited until the last moment to raise the ceiling, Lew said it "could inflict even greater harm on the economy."

He faulted a provision in a bill recently passed by the House that would set priorities on what bills would be paid, saying, "Any plan to prioritize some payments over others is simply default by another name."

"There is no way of knowing the damage any prioritization plan would have on our economy and financial markets," Lew said. "It would represent an irresponsible retreat from a core American value: We are a nation that honors all of its commitments."

The latest estimates are that treasury will have only $30 billion by Oct. 17 to pay its bills, the secretary said.

"If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history," Lew said.

President Obama is willing to negotiate over future budget needs, Lew said, "but he will not negotiate over whether the United States will pay its bills for past commitments."