Lew’s approach to the debt limit has focused on a few basic ideas. He has scrapped, temporarily, the traditional Treasury secretary role of cheering up financial markets and is making it clear he thinks investors should be worried about the possibility the U.S. won’t make all its payments on time.
“The calm out there,” he said in a discussion with Bloomberg View’s Al Hunt on Sept. 24, “is a bit greater than it should be.”
That comment was “an unusual step for a Treasury secretary,” said Omair Sharif, an economist for RBS Securities in Stamford, Connecticut. “It shows it’s all hands on deck to get pressure on the Republicans to move to raise the debt limit.”
Senator Ron Johnson, a Wisconsin Republican, said at an Oct. 11 Bloomberg breakfast that the administration should try “to calm the markets, not scare them.”
“Responsible leadership wouldn’t be going out there going, ‘There’s going to be catastrophe coming,’” Johnson said, referring to comments by Obama and Lew warning of dire consequences if the U.S. can’t make all its payments.
Hewing Line
Senators Orrin Hatch of Utah and Rob Portman of Ohio have said deficit-reduction packages over the last 30 years were agreed to within the context of the debt ceiling. By not negotiating, the administration is departing from normal practice, they said.
“He’s hewing to the line,” Hatch said in an Oct. 7 interview. “I’m one who likes Secretary Lew, but to be honest with you he’s been very partisan on all this. He is the most partisan secretary of the Treasury that I’ve seen since I’ve been here.” Hatch became a senator in 1977.
Lew has spoken to or met with at least a half-dozen Republicans in Congress on the debt limit and with the entire Senate Finance Committee in private, according to the Treasury Department. He also attended Obama’s talks with House Republican leaders on Oct. 10 and Senate Republicans on Oct. 11.
At those meetings, he dispenses with small talk and gets “pretty much straight to business,” said Representative James Lankford, an Oklahoma Republican.