Treasury Secretary Janet Yellen told Congress on Tuesday it faces a hard deadline of Oct. 18 to lift the debt limit and avoid default as Democrats and Republicans bicker about spending on Capitol Hill.
Ms. Yellen said the department’s use of “extraordinary measures” would run out by that date, which is less than three weeks away.
“At that point, we expect Treasury would be left with very limited resources that would be depleted quickly. It is uncertain whether [we] could continue to meet all the nation’s commitments after that date,” the secretary wrote in a letter to Democratic House Speaker Nancy Pelosi.
Her warning comes one day after Senate Republicans blocked a bill that would have funded the government through Dec. 3 and suspended the limit on the federal debt until the end of 2022.
Senate Minority Leader Mitch McConnell has repeatedly said that his side will not help Democrats, who enjoy slim majorities in Congress, lift the credit limit as they push a massive bill that spends trillions on social welfare spending.
Democrats say the GOP incurred relevant debts under former President Trump through tax cuts and COVID-19 relief spending so they should join the debt-limit effort. They warn a default on the national debt would cause havoc for world markets and damage the nation’s credit rating.