The US will exhaust its emergency cash-management measures by November 3 and risks running out of cash shortly thereafter if the debt limit is not increased by the Congress, the Treasury Secretary Jacob Lew has warned American lawmakers.
As of now, the federal debt limit is set at $18.1 trillion and the Obama Administration wants the Republican-controlled Congress to increase the debt limit thus allowing it to borrow more money to run <g data-gr-id="19">day-to-day</g> operation of the federal government.
In a letter to the Congress, Lew said that after November 3, Treasury would operate on a cash balance of less than $30 billion, which would be depleted quickly.
“In fact, we do not foresee any reasonable scenario in which it would last for an extended period of time,” he said.
Lew also said the US government would not be able to meet most of its obligations without a higher debt ceiling and thus urged Congress to raise it. “The government makes approximately 80 million payments a month, including Social Security and veteran benefits, military salaries, Medicare reimbursements, and many others,” Lew said. “In the absence of congressional action, Treasury would be unable to satisfy all of these obligations for the first time in the history of the United States.
“The creditworthiness of the United States is an essential component of our strength as a nation. Protecting that strength is the sole responsibility of <g data-gr-id="23">Congress,</g> because only Congress can extend the nation’s borrowing authority,” the Treasury Secretary said.