The recent US government shutdown and debt limit showdown bruised the nation’s economy and “can never happen again,” US Secretary of the Treasury Jack Lew said in an interview that aired on Sunday.
“We took an economy that is fighting hard to get good economic growth going, to create jobs for the American people, and took it in the wrong direction,” Lew said on NBC’s Meet the Press program.
He said borrowing costs went up and economic activity suffered after more than two weeks of a partial government shutdown, as the country came within hours of reaching its legal borrowing limit and defaulting on its debts.
“This one was a little bit scary, because it got so close to the edge,” Lew said. “We need to make sure that the government does not go through another round of brinksmanship. This can never happen again.”
The Treasury secretary said he was “confident our economy can recover” from the damage done by the budget stalemate.
However, he said the economy is hindered by “deep spending cuts that are part of sequestration” — arbitrary, across-the-board spending cuts that came into force in March and will take another cut from the federal budget in January.
This looks to be the next big budget battle, which only earned a temporary reprieve with the deal that ended the showdown last week.
The compromise plan hashed out in the US Senate and passed by the US House of Representatives funds the government only until Jan. 15 and extends US borrowing authority until Feb. 7.
US President Barack Obama has already begun calling for a rollback of the “sequester” cuts, an argument Lew reiterated on Sunday.
“The president has made clear that we think you should replace some of the sequestration cuts with sensible balance, entitlement and tax reforms that put us in the right direction for the future,” he said.