The US will hit its borrowing limit in mid-October and would likely be unable to pay all its bills soon after, the Treasury warned on Monday.
In a letter to Republican House speaker John Boehner that sets the stage for another round of budgetary brinkmanship, Treasury secretary Jack Lew said: “Congress should act as soon as possible to protect America’s good credit.”
Lew warned failure to act soon could do “irreparable harm” to the US economy.
Government officials and economists had been expecting the US to reach its $16.69tn “debt ceiling” this autumn, but mid-October is earlier than some had expected.
The news comes as Congress prepares for yet another fight over whether or not to raise the debt ceiling in the coming weeks.
Lew said the Treasury would reach its borrowing limit by mid-October and would then be left to fund the 80m payments per month, including military salaries and social security cheques, with a cash balance estimated at $50bn.
via The Guardian