Federal Government Will Run Out of Cash on Oct. 18 If Debt Ceiling Isn’t Raised: Treasury Secretary

Treasury Secretary Janet Yellen on Tuesday warned members of Congress that the United States’ cash reserves will likely be exhausted unless lawmakers vote to raise or suspend the debt ceiling by Oct. 18, warning that it’s not clear if the United States would be able to meet all of its financial obligations if no deal is passed by then.

If that deadline is reached, “we expect Treasury would be left with very limited resources that would be depleted quickly,” Yellen warned, adding that it is “uncertain whether we could continue to meet all the nation’s commitments after that date.”

Should the debt limit be reached without a bill passed in Congress, Yellen wrote (pdf) that there could be “substantial disruptions” to the stock market that will thereby “erode investor confidence” and increase volatility. The federal government has spent, on average, about $50 billion per day and at times has exceeded $300 billion in daily expenditures in the past year, according to her office.

“Furthermore,” the secretary added, “we know from previous debt limit impasses that waiting until the last minute can cause serious harm to business and consumer confidence, raise borrowing costs for taxpayers, and negatively impact the credit rating of the United States for years to come.”

The Bipartisan Policy Center recently projected that the Treasury will run out of cash to meet the government’s financial obligations between Oct. 15 and Nov. 4.