Treasury's Lew Sees Likelihood of Budget Deal

(J. Scott Applewhite/AP)
By MARTIN CRUTSINGER

WASHINGTON -- Treasury Secretary Jacob Lew said Thursday that he is optimistic that President Barack Obama will be able to reach an agreement with Republicans in Congress to break a budget impasse that's triggered across-the-board government spending cuts.

Lew said Obama has been "deeply engaged over the past week in trying to open the door for conversations" with lawmakers in the search for a "sensible center."

Lew, who served as budget director for Obama and also in the Clinton administration, said he expected to be "very much involved in the conversations."

"I think there is a broad understanding of the size of the problem," Lew said. "There's even a broad understanding of what an ultimate solution probably looks like, but we need to figure out the path to get from here to there."

Lew spoke to reporters after touring a Siemens AG (SI) manufacturing plant outside Atlanta. It was his first trip since being sworn in as Treasury secretary last month.

Asked in an interview with CNBC whether he thought an agreement could end the automatic budget cuts that took effect March 1, Lew said it was too early to say what the agreement might entail. But he said all agree that the government cuts, which will reduce spending by $1.2 trillion over a decade, pose a threat to the economy.

"I think there are better alternatives, and we have a little bit of time," Lew said. "The conversation is engaged now, and I hope over the coming weeks and months that we can work through this problem."

Obama traveled to Capitol Hill this week to meet with Democratic and Republican lawmakers in both the House and Senate.

Lew said those conversations and discussions he had with senators during his confirmation hearing led him to conclude that "there is a growing number of members on a bipartisan basis who want to do something sensible."

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AP writer Johnny Clark in Atlanta contributed to this report.

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