September 28, 2021

The Treasury Department could run out of money by Oct. 18, triggering a disastrous default on the nation’s debt that would damage the U.S. economy for years to come, Secretary Janet Yellen warned congressional leaders in a new letter on Tuesday morning.

Actions the agency is taking to skimp on cash to keep paying the government’s bills on time could be exhausted in just three weeks, she said. “At that point, we expect Treasury would be left with very limited resources that would be depleted quickly,” the secretary wrote. “It is uncertain whether we could continue to meet all the nation’s commitments after that date.”

The specific deadline comes as congressional leaders remain deadlocked in a standoff over raising or suspending the cap on how much the government can borrow. GOP leaders insist that Democrats must handle it on their own through the special budget process that they’re using to pass President Joe Biden’s multitrillion-dollar social spending bill — an untested route that could take roughly two weeks and pose a number of procedural issues.

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