Lew pushes to eliminate spending cuts

Treasury Secretary Jack Lew.

NEW YORK (CNNMoney)

He laid out the Obama administration's case in an op-ed for The International New York Times that the failure to replace the across-the-board "blunt spending cuts" would hurt the U.S. economy.

"As independent economists and business leaders will tell you, these cuts have already slowed economic growth, just as the economy was getting traction," he wrote. "The nonpartisan Congressional Budget Office has estimated that by the third quarter of next year, sequestration will have reduced real gross domestic product by as much as 1.2 percent, which means as many as 1.6 million fewer American jobs."

Related: Spending cuts are hurting economy

The blanket cuts are a product of the 2011 fiscal stalemate and subsequent failed attempts to produce an alternative. The sequester is widely disliked but took effect anyways, shaving spending from nearly every piece of the federal budget, except funds for mandatory programs like Social Security.

Even some Republicans who favor cutting government spending see the sequester cuts as too indiscriminate.

"The real problems are that we're continuing to spend money that we don't have on things that we don't need," Sen. Tom Coburn said Sunday on NBC.

"There's tremendous amounts of waste and fraud. We have to protect the promises made to American people. And we can do that, but we can do that spending a whole lot less money than we're doing today," he continued.

Related: What the heck is the sequester?

The next scheduled round of cuts will be even deeper.

The debt ceiling deal Congress reached this month funded the government at current levels and put off a decision on the sequester until January 15.

But their track record of resolving these issues isn't great.

Related: Congress votes to do its job

Lew, however, said the U.S. remains a stable "backbone of the global financial system."

"The world now knows we are and will remain the safest, most reliable place to invest," he wrote, according to a copy of the text from the Treasury Department. "Make no mistake: What took place was a political crisis, not an economic one."

First Published: October 20, 2013: 3:24 PM ET

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