Treasury: November 5 deadline for Congress to act on debt limit

5, when Treasury estimates that the federal government would have only $30 billion in cash on hand.

Lew urged Boehner to move quickly to pass legislation raising the debt ceiling, warning that “there is no way to predict the catastrophic damage that default would have on our economy and global financial markets”.

The government will run out of money to pay its bills sooner than previously thought, forcing Republican lawmakers who are already scrambling to elect new leaders to immediately confront a series of unpopular fiscal deadlines. While Congress on Wednesday averted a government shutdown by passing a stop-gap measure to extend funding to federal agencies until mid-December, there has yet to be a deal reached on addressing the nation’s debt limit.

The national debt has, for all legal purposes, been frozen at the $18.1 trillion legal limit since March, when the Treasury Department began taking “extraordinary measures” to avoid taking on more debt.

That likely means the matter must be resolved before House Speaker John Boehner, R-Ohio, leaves Congress at the end of October. As Lew notes in the letter, “Without sufficient cash, it would be impossible for the United States of America to meet all of its obligations for the first time in our history”.

On November 5, the Treasury would be left to fund the government with less than USD30 billion.

But Obama has since refused to negotiate over the debt limit and last year’s increase passed largely on the votes of House and Senate Democrats. But daily outlays can exceed $60 billion on a few days, providing little cushion if more money goes out than comes in. The ultimate date that Treasury exhausts extraordinary measures, however, could be sooner or later than November 5.

Boehner’s departure complicates the process of the budget and debt ceiling negotiations ahead. “We will continue to update Congress as we receive additional information”.

In 2011, Standard & Poor’s downgraded the US triple-A credit rating for the first time after the Treasury came within days of being unable to pay certain benefits such as Social Security. Over the last several weeks, the trend in our projected net resources has been negative, which has reduced the amount of time that we expect to be able to finance the government.