Jack Lew Is Still Surprisingly Vague About How He’ll Deal With a Debt Ceiling Breach


From Jack Lew’s congressional testimony this morning:

In testimony before the committee, Mr. Lew stressed that the Treasury Department would run out of “extraordinary measures” to free up cash in a matter of days. At that point, the country’s bills might overwhelm its cash on hand plus any receipts from taxes or other sources, leading to an unprecedented default. Mr. Lew said that Treasury had no workarounds to avoid breaching the debt ceiling. “There is no plan other than raising the debt limit,” he said. “The legal issues, even regarding interest and principal on the debt, are complicated.”

He also said prioritizing payments to bondholders or others might not be workable, adding that the Treasury would face significant technical issues in trying to rejigger its complicated automated payment systems to pay certain bills but not others. “Our systems were not designed to not pay our bills,” he said.

Some market participants have suggested that Treasury might simply pull the plug on one or more of its payments systems to prevent money from going out, perhaps telling the recipients of that money that it would pay them when possible. But “I don’t believe there is a way to pick and choose,” except on a broad basis, Mr. Lew said.

I just don’t get this. Maybe this is the best Lew can do, but given all the time he’s had to study this, and the fact that we’re only a week or two away from D-Day, how is it that he doesn’t know (a) how close we are to running out of money, (b) whether prioritization is possible, and (c) if Treasury’s computer systems allow it to choose which bills to pay.

I’m not a nutball Republican denier, but even I don’t believe this. It’s October 10. This is our second go-around with a debt ceiling crisis. We’ve been planning for this one for more than six months. Is it really plausible that Lew still doesn’t know if prioritization is possible? Is it really plausible that there’s still no plan in place? Is there some reason he isn’t telling Congress what that is?

Something doesn’t add up here.

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is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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