The federal government is set to run out of cash by Oct. 1, CNN Business reports. Congress must now raise the debt ceiling in order to avoid the crisis.
If that doesn’t happen, the U.S. could default on its debt, which could lead to the stock market and economy plummeting, and interrupt deposits to millions of residents for Social Security, military pay, and more.
“It is uncertain whether we could continue to meet all the nation’s commitments after that date,” Treasure Secretary Janet Yellen said in a letter.
“It is important to remember that estimates regarding how long our remaining extraordinary measures and cash may last can unpredictably shift forward or backward,” she added. “This uncertainty underscores the critical importance of not waiting to raise or suspend the debt limit. The full faith and credit of the United States should put at risk.”
Yellen issued her guidance after Senate Republicans impeded legislation that would delay the debt limit. She also said that the Oct. 18 date is an educated guess of when the U.S. would exhaust its funds, but it could be earlier.
“New data demonstrate that Congress has only weeks to address the debt limit,” Shai Akabas, director of economic policy at the Bipartisan Policy Center, said in a statement, per The New York Times. “If they don’t, the U.S. government risks missing or delaying critical bills that will come due in mid-October that millions of Americans rely on, from military paychecks and retirement benefits to advanced child tax credit payments.”
The U.S. reached its statutory debt limit in late July, and since then, the Treasury Department has been employing “extraordinary measures” to block a default. The policy center said that if the actual deadline is Oct. 15, then the Treasury Department would need $265 billion to pay its bills through mid-November.
