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Treasury could run out of cash in early September, urges Congress to raise debt ceiling before recess

Key Points
  • "Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes," Treasury Secretary Steven Mnuchin said in a letter to House Speaker Nancy Pelosi on Friday.
  • "As such, I request that Congress increase the debt ceiling before Congress leaves for summer recess," Mnuchin said.
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Treasury Department warns the US could hit debt ceiling in early September

The Treasury Department said it could run out of cash in two months, asking Congress to increase the debt ceiling before lawmakers leave for a six-week recess.

"Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes," Treasury Secretary Steven Mnuchin said in a letter to House Speaker Nancy Pelosi on Friday.

"As such, I request that Congress increase the debt ceiling before Congress leaves for summer recess," Mnuchin said.

Lawmakers and the Trump administration are rushing to pass a spending deal and raise the U.S. borrowing limit to avoid another government shutdown. Mnuchin previously said the White House will offer a one-year continuing resolution and debt ceiling increase if the two sides cannot strike a deal.

Funding for the current fiscal year runs out Sept. 30. The government partially shut down for a record 35 days in December and January after funding lapsed.

Here's the full letter from the Treasury Department to Congress:

Dear Madam Speaker:

Since there is a reasonable uncertainty in projecting government cash flows, it is impossible to identify precisely how long extraordinary measures will last. We model various scenarios for our cash projections. Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes.

As such, I request that Congress increase the debt ceiling before Congress leaves for summer recess.

Sincerely,

Steven T. Mnuchin