US funding needs will top its borrowing limit on November 3, leaving the government short of the cash necessary to fund budgeted operations, Treasury Secretary Jacob Lew warned Thursday.
Lew said in a letter to Congress that the legislature's failure to raise the country's borrowing ceiling by then would leave the Treasury unable to fully pay all of the government's obligations, which include salaries, retirement benefits, debt service, and other commitments.
"Operating the United States government with no borrowing authority, and with only the cash on hand on a given day, would be profoundly irresponsible," Lew said.
Borrowing by the Treasury hit the ceiling of about $18.1 trillion months ago, and since then it has been taking extraordinary accounting measures to meet its commitments.
But with the US budget carrying a deficit of about $426 billion this year, the state needs to keep borrowing more to make up the difference.
But Congress has not yet acted to raise the statutory ceiling, and with the majority Republicans in internal disarray over who will lead the party and the House of Representatives, fears are that the body will not be able to increase the ceiling before the November deadline.
Lew warned that not increasing the borrowing limit could spill over onto the economy and hurt the country's credit rating.
He also warned that being forced to operate on a very low cash balance could hamper the government's operations in emergency situations.
The Treasury expects its daily cash balance could go as low as $30 billion, when it needs at least $150 billion for safety.
"Maintaining this minimum balance helps protect against potential market interruptions, which in the past have been caused by events such as Hurricane Sandy and the 9/11 terrorist attacks," he wrote.
"I respectfully urge Congress to take action as soon as possible, raise the debt limit without delay, and remove an unnecessary threat to our economy," Lew said.