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First Posted: 10/20/2013

(AP) Treasury Secretary Jacob Lew says the just-resolved budget fight was “a little bit scary” because it “got close to the edge,” and the lesson has to be that U.S. won’t be put in that position again.


“It can’t happen again,” said the Obama administration’s chief spokesman on the economy.


An impasse between President Barack Obama and a group of Republicans over spending for the budget year beginning Oct. 1 led to a 16-day, partial government shutdown and the furlough of hundreds of thousands of civil servants.


Lawmakers also pushed the country to the edge of economic default by threatening the Treasury Department’s authority to continue borrowing the money needed to pay the nation’s bills.


The situation was resolved last Wednesday when Congress agreed to fund the government through Jan. 15 and allow Treasury to continue borrowing through Feb. 7.


A group of House and Senate lawmakers has until Dec. 13 to produce a spending deal to stave off another shutdown and possible default in early 2014.


During the period of economic uncertainty spawned by the shutdown and the default threat, Lew said the nation’s borrowing costs increased and economic activity was affected. He offered no dollar figures during an interview with NBC’s “Meet the Press” that was taped Friday and broadcast Sunday.


“The direction is that it took an economy that is fighting hard to get good economic growth going, to create jobs for the American people, and it took it in the wrong direction,” Lew said of the budget fight. “Our job is to move things in the right direction. This one was a little bit scary because it got so close to the edge.”


He said he now looks to Republican leaders who have said publicly that the shutdown was the wrong strategy for the party to pursue.


“I think the message that we have to send going forward is that there was a turning point on Wednesday night and this won’t happen again,” Lew said. “It can’t happen again.”


Lew also commented on negotiations with Iran over its nuclear program, saying it was premature for any talk of softening stiff economic penalties.


Iran has said its program is for peaceful purposes and has denied claims by the U.S. and other countries that the real goal is to build a nuclear weapon.


“What I’m saying is, we need to see that they’re taking the steps to move away from having nuclear weapons capacity,” said Lew, whose department enforces the sanctions. “We need to see real, tangible evidence of it, and that we will not make moves in the sanctions until we see those kinds of moves.”


Nuclear talks in Geneva between Iran and six world powers ended on an upbeat note Wednesday, with Western and Iranian negotiators announcing a follow-up round next month.


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Follow Darlene Superville on Twitter: http://www.twitter.com/dsupervilleap


Associated Press