The Obama administration warned Congress on Friday the government could start missing payments on its bills soon after February 27 if lawmakers do not raise a limit on government borrowing.
In a letter to congressional leaders, Treasury Secretary Jack Lew said accounting measures aimed at staving off default would only buy about three weeks worth of time.
By February 27 when they are exhausted, the government anticipates having roughly $50 billion in cash and would have to rely on this cushion and incoming revenue to pay its bills, Lew said.
He noted that uncertainties over the size of tax refunds made it unclear exactly how much cash would be left in government coffers at the end of the month. In any case, the money would not last long.
“Any foreseeable cash balance would be exhausted quickly,” Lew said in the letter.
The United States runs budget deficits in a peculiar way. Congress and the president authorize spending, but they separately have to approve enough borrowing to pay the bills.
Since 2011, lawmakers have regularly balked at White House requests to raise the statutory debt ceiling, bringing the nation perilously close to default and riling financial markets.
This year, some Republicans again have vowed to extract policy concessions from Democrats before allowing the debt limit to rise, although they appear to be scaling back demands to reduce the risk of a crisis.