On Tuesday’s broadcast of CNBC’s “Squawk on the Street,” Jack Lew, who served as Treasury Secretary during the Obama administration, stated that while he doesn’t think there should have been spending changes tied to raising the debt ceiling, “Democrats are going to have to accept levels of spending reduction that might be challenging” as part of a deal to raise the debt ceiling.
Lew said, “I think it’s good that the sides are talking, but they have to be careful and not…go across the line. Republicans can’t think because this is so important that that will all of a sudden mean that Democrats can concede on issues that are just matters of real principle. Likewise, I think Democrats are going to have to accept levels of spending reduction that might be challenging. The numbers that are in circulation are going to be much smaller than the House bill. They can’t have their eye on saving $3.5 or $4 trillion. I think the question is, what can they agree to in the next couple of years so that we don’t end up with a crisis.”
He added, “I think the administration was right to say that you cannot be held hostage. I think it’s important that negotiation over the budget is going on. I just wish they would complete it and get to work. Once they have an agreement, extending the debt ceiling is going to be attached to whatever they do.”
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