Washington's political impasse could cause a recession, warns Mark Patterson, former chief of staff to Treasury Secretary Jack Lew.

The longer the government shutdown continues, the more damage it will do, Patterson, senior fellow at the Center for American Progress, told CNBC.

A short shutdown would have little impact. However, if it lasts and approaches the debt ceiling debate, "then obviously it's a different ball game altogether," he said.

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The possibility that Congress doesn't raise the debt ceiling is a larger threat to the economy, he believes. The Treasury Department says the government will run out of funds Oct. 17 if the limit is not increased.

"If the debt ceiling doesn't work out as it should then you could see serious negative economic effects, including a potential return to recession."

Failure to raise the debt limit, which authorizes how much the Treasury Department can borrow, could prompt the government to default on its debt payments.

Washington's failure to agree to budget is a bad sign for its prospects of agreeing to raise the debt ceiling, he fears.

"Right now we're not able to solve just the government funding problem. So to merge these two very thorny issues together, which politicians are having a hard time grappling with, is not a recipe for success in my opinion," Patterson noted.

"The stakes are pretty high and the frustrating thing is that it's really unnecessary. The solution is easy to see. Congress can easily pass a bill to re-open the government and raise the debt ceiling today if the will was there."

CEOs agree that a prolonged shutdown could lead to another recession, according to Bloomberg.

"Everyone will get more conservative and pull back on hiring and investing," David Cote, chief executive of Honeywell, told Bloomberg Television.

"If this lingers for a while, it endangers the economic recovery at best," JetBlue CEO Dave Barger, Bloomberg reports. "If this percolates into the psyche of business and everybody starts to back off travel spending and it can trickle down to others. This is really serious."

United Technologies Corp.'s Sikorsky Aircraft has slowed production of its Black Hawk helicopters because Defense Department inspectors were furloughed as part of the shutdown.

"The immediate impact of the U.S. government shutdown on Sikorsky is only manageable for a short time," a Sikorsky spokesman stated, according to Bloomberg.

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