Transcript: Senate hearing Q&A with Sen. Orrin Hatch & Treasury Secretary Jack Lew on the debt ceiling – Oct. 10, 2013

Partial transcript of Q&A between Sen. Orrin Hatch (R-Utah) and Treasury Secretary Jack Lew on the potential impacts of the failure to raise the debt ceiling. The Senate Finance Committee hearing was held on Oct. 10, 2013:

Sen. Orrin Hatch (R-Utah):
Secretary Lew, I want to be clear about the administration’s position on the debt limit. As I understand it, the President will only accept a so-called “clean” debt limit hike with no other accompanying policy or fiscal consideration attached to it. I’ve asked you repeatedly how much of a debt limit increase you would like and for how long, and you have responded that it’s up to Congress.

Now, the administration’s position is unfortunate because it is clear that we have a debt problem and that the fundamental driver of our debt is unreasonable, unsustainable spending in our entitlement programs. I believe we can and should use this as an opportunity to address these problems…

…As long as there is nothing attached to a debt limit increase, the administration will say nothing more about it, including preferred outcomes in terms of how much of an increase and for how long? Is my understanding correct? Or if you wish to give me your preferences about how big of a debt limit increase you would like to have and for how long you would like so at least we could begin discussions and negotiations on this particular issue.

Treasury Secretary Jack Lew:
Senator, you and I have discussed this a number of times and we’ve corresponded a number of times, and I wrote to you just last week – a few days ago stating what our view is.

Our view is that this economy would benefit from more certainty and less brinksmanship. So the longer the period of time is, the better for the economy. It’s really Congress’s decision how often it wants to vote on the debt limit.

I believe that more certainty is better. I think the Senate Leader and the Chairman has put forward a proposal –

Sen. Orrin Hatch (R-Utah):
…All I’m asking is how much do you want? How long? Those are two simple questions. How much do you want us to raise and how long?

Treasury Secretary Jack Lew:
Senator, the question of how long is one I think I’m answering as clearly as I can. The longest the Congress is prepared to extend it for is the best. I think – the President tried to be clear in his statements in recent days that if Congress passes something shorter, he was open – he’s not looking for there to be a crisis here. But Congress would be right back dealing with this. So the better solution is to go longer.

So we’ve tried to be very clear and everyone knows the numbers that are associated with different periods of time.

Sen. Orrin Hatch (R-Utah):
Well, it’s not clear to me.

Secretary Lew, the recent long-term outlook from the non-partisan Congressional Budget Office makes a number of things abundantly.

First, between 2009 and 2012, the federal government recorded the largest deficits since 1946, causing federal debt to soar as a share of our economy to an amount higher than at any point in U.S. history except for a brief period during World War II. Gross debt now stands at 107% of our GDP.

Second, our debt path is unsustainable, threatening to bring us to this fiscal crisis.

Third, the root of our spending problem is the government’s major health care programs. It includes not just Obamacare but Medicaid and Medicare as well and others.

Fourth, trust funds in Social Security and our health entitlement programs face exhaustion. Yet, when it comes to negotiating solutions to our entitlement spending problem, all I hear from the administration is that negotiations can only proceed if first the President is guaranteed yet another tax hike or if the only spending restraint we have enacted thus far is turned off.

And when it comes to so much as even discussing solutions to our entitlement spending problem, all I hear is negotiations can only proceed if first we pass a clean continuing resolution and a clean debt limit increase. What does it take beyond a guarantee from the President and congressional Democrats that they first get yet another tax hike or that the sequester be undone to get the administration to the table to talk about entitlement reforms such as the ones I’ve proposed…?

Treasury Secretary Jack Lew:
Senator, I think the record is clear that the President has negotiated, has wanted to negotiate, and remains anxious to negotiate on a bipartisan basis to have a fair and balanced approach to dealing with our fiscal problem.

Sen. Orrin Hatch (R-Utah):
It’s not clear to me.

Treasury Secretary Jack Lew:
He’s been on the verge of agreements twice until frankly it was not acceptable to Republicans in Congress. He was prepared to do very hard things. He was ready to have an agreement twice – in 2011 and the end of last year. He put in his budget very tough policies – policies that many of the Democrats on this committee find very challenging because he wanted to make clear he was looking for a balanced approach to entitlement reform and tax reform to settle our fiscal matters in a sensible way for the medium and long-term.

So I think the President’s record on being willing to negotiate is clear.

I would just make one comment on…the trajectory of our deficit.

I would just note that when the President took office in January 2009, we were in the middle of the worst recession since the Great Depression, we were in the middle of two wars, and we had a deficit that was 9% of our economy. We’ve cut that in half. We’re making progress. We have more to do, but I don’t think it’s fair to say that we are at the same place we were. We’ve made tremendous progress.

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One Comment on “Transcript: Senate hearing Q&A with Sen. Orrin Hatch & Treasury Secretary Jack Lew on the debt ceiling – Oct. 10, 2013

  1. Pingback: Spotlight: Debt Limit 2013 | What The Folly?!

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