Treasury Secretary Steven Mnuchin is warning that the government could run out of cash in September if Congress does not lift the debt ceiling before leaving for August recess.
In a letter to Speaker Nancy Pelosi on Friday morning, Mnuchin explicitly requested “that Congress increase the debt ceiling before Congress leaves for summer recess.”
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“We model various scenarios for cash projections. Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes,” Mnuchin said.
The Treasury secretary said because of uncertainty in those models, “it is impossible to identify precisely how long extraordinary measures [to avoid default] will last.”
The House is set to leave for break in two weeks. The Senate will follow a week later, according to the congressional calendar.
Both Pelosi and Senate Majority Leader Mitch McConnell (R-Ky.) are eager to raise the debt ceiling but have hoped to do so as part of a broader, two-year budget agreement.
Though Pelosi has been in discussions with Mnuchin this week, the updated debt limit timetable raises the prospect that Congress will separate an agreement to lift stiff spending caps from legislation raising the debt ceiling, given the bipartisan desire to avoid rattling markets with a possible default.