US Treasury Secretary Jacob Lew said Tuesday that reducing the nation’s deficit should not overshadow the need to boost economic growth and job creation.
“Important as the deficit is, it cannot be our guiding star. Deficit reduction alone is not an economic policy,” Lew said in a speech in Cleveland, Ohio, according to the prepared text.
“We have to apply the same sense of urgency to expanding our economy and getting people back to work,” he told the City Club of Cleveland.
Lew pointed out that the United States was still living with the “scars” caused by the 2008 financial crisis.
To battle an unemployment rate of 7.5 percent, Lew insisted that an ambitious infrastructure building program was needed.
He said the program would have an element to attract private capital to avoid further adding to the nation’s debt, which is projected to reach 108.1 percent of the economy’s output this year, according to the International Monetary Fund.
The Treasury chief blasted the government’s “sequester” spending cuts that took effect on March 1 due to the failure of a bitterly divided Congress to find a compromise solution to deficit reduction.
The sequester will slash $85 billion in spending through the end of the fiscal year September 30, and has already forced the cancellation of the Cleveland Air Show, costing the local economy millions of dollars in lost revenue, he noted.
“This is not good public policy. And it is certainly not good economic policy,” he said.
“It is high time we replace the sequester before it causes even more pain.”