US Treasury Secretary Janet Yellen has warned that the US government will run out of money next month. One again she called on Congress to raise the debt limit.
In a letter to Congress on Wednesday, Yellen said that if the debt ceiling was not raised, the US may face a default on payments. The extraordinary measures that the Treasury Department has been using to finance the government will be exhausted next month.
Since August 1, the Treasury has taken emergency measures that temporarily provide funding to the US government.
These measures include the suspension of certain investments in the Civil Service Retirement and Disability Fund, the Postal Service Retiree Health Benefits Fund and the Government Securities Investment Fund of the Federal Employees Retirement System Thrift Savings Plan.
"Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history," Ms. Yellen wrote.
The Treasury is also unable to answer specifically how long emergency measures can be extended. Ms. Yellen said that a default would cause "irreparable harm" to the US economy and to global financial markets.
"We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States," she stressed.
