NBC "Meet the Press" - Transcript: Government Shutdown

Interview

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SAVANNAH GUTHRIE:
We turn now to day six of the government shutdown, no agreement in sight. Senator Rand Paul will be joining me from Kentucky in a moment. But first, let's turn to Treasury Secretary Jack Lew here with me in Washington. Mr. Secretary, good morning to you.

JACK LEW:
Good to be with you, Savannah.

SAVANNAH GUTHRIE:
Let's talk about this shutdown, we're six days in. Has there been any real, permanent damage to the economy from this shutdown so far?

JACK LEW:
Yeah, Savannah. The shutdown is harming people every day. I think we're seeing that in the kind of ironic actions of those who chose to shut the government down item by item, trying to reopen the government for things as they discover that there's real pain out there. If the shutdown ends quickly, we'll recover from the damage. If it goes on for a longer period of time, it will do more harm.

SAVANNAH GUTHRIE:
Well, given what you know of the terrain, are you looking at a few more days of a shutdown, are you looking at weeks?

JACK LEW:
Congress could act today. The optimistic view of things is there's a majority in Congress right now that would vote to reopen the government. They just need to bring it up for a vote. They could bring it up today.

SAVANNAH GUTHRIE:
There was a senior administration official quoted in The Wall Street Journal this week saying, quote, "We are winning. It doesn't really matter to us how long the shutdown lasts," quote, "because what matters is the end result." Does that reflect the view of the administration behind closed doors?

JACK LEW:
No.

SAVANNAH GUTHRIE:
This shutdown can go on as long as it wants because it's politically advantageous?

JACK LEW:
There are no winners here. Every day that the government is shut down, it does real harm to the American people. And I think you have to take a step back and look at where we are as a country, as an economy. The American people have been fighting their way out of the worst recession since the Great Depression. The economy is coming back.

They don't need politics in Washington to bring the economy down. Whether as a parent who's relying on Head Start or somebody who's looking for medical care or a government agency that needs intelligence, they need to open the government up. They could do it today.

SAVANNAH GUTHRIE:
You mentioned that Republicans have passed a series of bills in the House to fund parts of the government, such as FEMA, such as the V.A. Why not take them up on that offer?

JACK LEW:
It just doesn't work. I mean, they need to open up the whole government. You can't cherry pick an item here, an item there. There are too many important things the federal government does. And they need to open it up and they could, because a majority is ready to do it. I started out my career here in Washington working on the Hill. I worked for Speaker O'Neill. He said the one thing that the American people won't tolerate is obstructionism. A majority needs to be given a chance to work its will.

SAVANNAH GUTHRIE:
As you well know, we are facing an even more potentially disastrous deadline. October 17th for the nation's borrowing limit to the debt ceiling to be raised. Lest the country potentially default on its obligation. But let me put this to you very, very clearly. Is October 17th also the day that the country defaults?

JACK LEW:
Let me be clear. We actually hit the debt limit in May. From May until this week, we've been using what are called "extraordinary measures" to create a bit of additional head room. On Tuesday, I informed Congress that I had used the final extraordinary measures. There are no more. So we're now limited to the borrowing capacity that we have today. On October 17th, we will exhaust our borrowing capacity. And at that point, I have nothing else in the drawer.

SAVANNAH GUTHRIE:
Does that mean default happens that same day?

JACK LEW:
On October 17th, we're left with the cash on hand. And I've told Congress that I believe that there will be approximately $30 billion of cash on hand, which is a lot of money and it sounds like a lot of money to the American people. But you have to put it in the context of the cash flow of the United States. We are a $4-trillion enterprise and on any individual day, you could be $50 billion or $60 billion cash flow negative or positive. $30 billion is a dangerously low level of cash. And we're on the verge of going into a place we've never been, not having cash to pay our bill.

SAVANNAH GUTHRIE:
I guess the question is then for you, not raising the debt ceiling, is that tantamount to default, whether it's in a day, a week, or a month?

JACK LEW:
So the reality is that if we run out of cash to pay our bills, there is no option that permits us to pay all of our bills on time. Which means that a failure of Congress to act would for the first time put us in a place where we're defaulting on our obligations as a government because of Congress's failure to act.

SAVANNAH GUTHRIE:
One of the reasons you're here is to sound that alarm. If this country were to default on its obligations, what would be the consequence in the economy? I mean, are you talking catastrophe?

JACK LEW:
We've never crossed this line, so everyone is speculating on what happens if the unthinkable happens. Let me just read to you from what President Reagan said when he faced this. And I quote, "The full consequences of a default, or even the serious prospect of default by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar and exchange markets." Why would anyone take that risk?

SAVANNAH GUTHRIE:
To put a fine point on it, it would be calamitous for the economy?

JACK LEW:
It would be very bad. And I think that for people to say, "We want to know the last minute to act. We want to know the last dollar." Even getting close to the line is dangerous. We saw in 2011 there was no default in 2011. It hurt the economy to get close to the line. We saw it in the stock market, we saw it in confidence, we saw it in investment. If we cross the line, we're going to a place that we've never gone. It's very dangerous.

SAVANNAH GUTHRIE:
Well, you've painted these dire consequences. So to put these two concepts together for me, on the one hand, you say it's terrible for the economy to even threaten default. And on the other hand, the president is saying, "I won't negotiate. I won't have any conversation about this. I won't negotiate to stop that from happen." How do you square those two things?

JACK LEW:
Well, to be clear, the president has been and remains prepared to negotiate on fiscal policy. He has spent much of the last three years trying to find the sensible middle ground. He's made offer after offer, negotiation after negotiation.

SAVANNAH GUTHRIE:
But the administration has said, "We don't want to have any negotiation until the government has reopened and until the debt ceiling is raised."

JACK LEW:
Let's remember where we are. We're where we are because in 2011, 50 to 100 of the most extreme members of the House changed the rules of the game. They said, "We would rather default than have an honorable compromise." It's Congress's job to fund the government and it's Congress's job to make sure we can pay our bills. There's nothing here that we're asking for from Congress for them to do that. We are happy to negotiate on reasonable policies with entitlement reform and tax reform that closes loopholes. That's something that we would like to do.

SAVANNAH GUTHRIE:
But realistically, why would they give up their leverage? You're essentially saying, "Agree to everything we want you to agree to, and then we can talk about that." That's the leverage they have.

JACK LEW:
Savannah, do you think about what the consequences of crossing this line are, you know? What would it mean in this country if we're not able to pay millions of people in social security on time? What would it mean if we are not able to pay hospitals through Medicare and Medicaid on time? There would be liquidity crises in homes, in businesses, in important institutions. It's just not responsible. It's reckless and irresponsible to say, "We'll bring all that down if we don't get our way."

SAVANNAH GUTHRIE:
Well, bottom line, it's something--

JACK LEW:
Congress needs to do its job and then we need to negotiate. The president wants to negotiate.

SAVANNAH GUTHRIE:
Well, let's do the bottom line here then. Is the president ready to watch this country go into default rather than negotiate with Republicans?

JACK LEW:
Look, the president believes that the responsibilities of Congress know the consequences and that this doesn't need to happen. They can vote today. They have a majority to do the right thing.

SAVANNAH GUTHRIE:
But will he not come to the table at all even at the risk of default?

JACK LEW:
I know the leaders of Congress, Republican and Democrats. I don't believe any of them want a default. They're going to need to look at how do they let a majority in Congress work their will.

SAVANNAH GUTHRIE:
Let me ask you about the health care rollout. This is something you're very familiar with. You were chief of staff during a period of time when it was being implemented. The White House says, "8.6 million unique visitors came to the website this week trying to get healthcare." But it cannot give a number on how many actually enrolled. There are more than glitches going on with this website. I pulled it up just this morning, I tried to get on healthcare.gov, this is what I saw. The site was down. It's been down partially all weekend. How do you justify that?

JACK LEW:
Savannah, if you look at the interest in people getting information about how to buy affordable healthcare for the first time for many people, the enormous outpouring of interest reflects how important this is and how important it is to get it right.

SAVANNAH GUTHRIE:
Fair enough, but why was the administration not ready for that interest?

JACK LEW:
We always anticipated there would be a lot of demand, and the demand is being satisfied. People are shopping on these websites. They're looking to see what their choices are. This is a big decision for families to make. They have six months to make a decision. People are getting on, they're getting the information they need, and they'll be making the decision. I completely think the experience of this last week underscores how important an accomplishment implementing the Affordable Care Act is.

SAVANNAH GUTHRIE:
Do you think it's going well?

JACK LEW:
I wouldn't say I'm the most early adapter to technology, but I have a fair share of apps on my devices. And I usually wait until a few days into them because they make corrections on day one, day two, day three. I think we're going through the same kind of process here and it's working well.

SAVANNAH GUTHRIE:
Thank you very much, Secretary Lew, always good to have you here. I appreciate it.

JACK LEW:
Great to be with you, Savannah.

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