US Economy

Lew: Treasury likely to run out of funds Feb. 27

Treasury Secretary Jack Lew
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U.S. Treasury Secretary Jack Lew urged Congress Friday to increase the debt ceiling, saying he is not confident extraordinary measures will last beyond Feb. 27.

In a letter addressed to House Speaker John Boehner, Lew highlighted that the Treasury must start implementing "extraordinary measures" to continue to pay the nation's bills because Congress has not acted to approve its normal borrowing authority.

In the past, the Treasury has managed to pay the bills for months after hitting the debt ceiling, using extraordinary measures to move cash from pocket to pocket.

But Lew said those measures would only buy about three weeks worth of time. By Feb. 27, the government anticipates having roughly $50 billion in cash and would have to rely on this cushion and incoming revenue to pay its bills.

Treasury to take 'extraordinary measures'

"At that point, Treasury would be left with only the cash on hand and any incoming revenue to meet our country's commitments," wrote Lew. "Any foreseeable cash balance would be exhausted quickly."

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Lew has consistently urged Congress to raise the debt ceiling. Earlier this month, he warned that he would start using emergency measures after Feb. 7 to avoid a first-ever default on the national debt.

Congress suspended the debt limit last October as part of a deal to re-open the government after a partial shutdown.

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.

--By Reuters contributed to this report.