Steep automatic spending cuts may stall US economic recovery: Lew
AFPWASHINGTON -- Steep automatic spending cuts slated for March 1 could stall the U.S. economic recovery, Jack Lew, the nominee for U.S. Treasury secretary, told Congress Wednesday.
February 15, 2013, 12:04 am TWN
Lew, who faced a grilling in a Senate Finance Committee confirmation hearing, warned that the US$85 billion sequester — toxic programmed cuts that will occur if Congress cannot find a compromise — would hit economic growth.
“Even as we move forward with deficit reduction, we need to make sure we leave sufficient room for critical investments in education, research, and infrastructure that we need for our economy to grow and compete globally,” Lew told the Senate panel in prepared remarks.
“We also have to avoid doing anything to degrade our national security or derail the economic recovery through abrupt moves in the short term.
“That is why we cannot allow the series of harmful automatic spending cuts known as the sequester to go into effect on March 1. These cuts would impose self-inflicted wounds to the recovery and put far too many jobs and businesses at risk.”
Lew, nominated by President Barack Obama in January to succeed Timothy Geithner as Treasury chief, stressed the need for bipartisanship in a Washington which he said showed the worst divisions in his decades of public service.
“Forging bipartisan consensus is not an abstract idea for me. It is the fundamental thread that spans my professional life,” Obama's former chief of staff and budget director said.
Obama, in his State of the Union address to a bitterly divided Congress late Tuesday, called for more spending on infrastructure, education and skills training, and has promoted an overhaul of the federal tax code to promote economic growth and more jobs.