WASHINGTON (AFP) - The United States will run out of money to pay its bills by early March if Congress does not raise the nation's borrowing limit, Treasury Secretary Jacob Lew said Thursday.
In a letter to Congress, Lew urged lawmakers to take "prompt action" to once again extend the debt limit, after the legislature extended it in October through February 7, amid fears the world's largest economy could default on its debt.
When the extension expires on February 7, the United States will hit the debt limit again, he said.
"At that time, in the absence of congressional action, Treasury would be forced to take extraordinary measures to continue to finance the government on a temporary basis," Lew wrote to Democratic and Republican leaders in Congress.
The Treasury currently estimates that by using those measures, "we would be able to extend the nation's borrowing authority only until late February or early March 2014." The Treasury's extraordinary measures were not expected to last for an extended period of time, mainly because the government sees large net cash outflows in February and March due to tax refunds, he said.
Lew praised the Republican-controlled House's overwhelming approval of a hard-fought two-year budget agreement, which was approved in the US Senate on Wednesday.
The measure goes to President Barack Obama, who is expected to sign it into law. The Democratic president said he was "pleased" with the vote.
"With these votes, Congress again has demonstrated its ability to work constructively to address the country's most pressing fiscal issues," Lew said.
"In this spirit, I am writing to urge Congress to take prompt action to protect the full faith and credit of the United States by extending the nation's borrowing authority." Lew reminded lawmakers that they need to allow the Treasury to finance the spending levels "established in the budget agreement" as well as other commitments they had approved.