Yellen warns Congress has just three weeks before US expected to default

Treasury Secretary Janet YellenJanet Louise YellenOn The Money — Build Back Better takes a 'Byrd Bath' Schumer steps on the gas to move Biden agenda Hoyer says Dec. 15 is drop-dead deadline to hike debt ceiling MORE warned congressional leaders of both parties on Tuesday that lawmakers have until Oct. 18 to raise or suspend the debt limit before the United States is expected to default on the national debt.

“At that point, we expect the 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,” Yellen wrote.

While Yellen called the date the agency’s “best estimate” as of now, she noted “the federal government's cash flows are subject to unavoidable variability.”

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“For example, the government's daily gross cash flow (excluding financing) over the past year averages nearly $50 billion per day and has exceeded $300 billion. As a result, it is important to remember that estimates regarding how long our remaining extraordinary measures and cash may last can unpredictably shift forward or backward,” Yellen wrote.

That uncertainty, the former Federal Reserve chairwoman said, underscores the “critical importance of not waiting to raise or suspend the debt limit.”

Yellen sent identical letters to Speaker Nancy PelosiNancy PelosiDole in final column: 'Too many of us have sacrificed too much' Dole to lie in state in Capitol Rotunda House to vote on Uyghur bill amid diplomatic boycott of Beijing Olympics MORE (D-Calif.), House Minority Leader Kevin McCarthyKevin McCarthyPressure grows to remove Boebert from committees Senate leaders face pushback on tying debt fight to defense bill News reporting in an age of rampant mendacity MORE (R-Calif.), Senate Majority Leader Charles SchumerChuck SchumerBuild Back Better Is bad for the states  Dole to lie in state in Capitol Rotunda Biden points to drug prices in call for Senate social spending vote MORE (D-N.Y.) and Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellDole in final column: 'Too many of us have sacrificed too much' Schumer steps on the gas to move Biden agenda Hoyer says Dec. 15 is drop-dead deadline to hike debt ceiling MORE (R-Ky.).

In recent days, Democrats have sought to tackle the debt limit via a continuing resolution to fund the government ahead of a Thursday deadline to avert a shutdown.

The legislation passed last week in the House, where Democrats hold a razor-thin majority. It failed in the evenly split Senate on Monday evening however, after Republicans followed through on their threat to block the legislation in opposition to Democrats’ trillion-dollar spending plans.

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McConnell has been urging Republicans to vote against raising the debt ceiling amid a high-stakes standoff with Democrats, as frustrations stew over a $3.5 trillion social safety net package the party aims to pass using reconciliation, a procedure that will allow them to bypass the Senate GOP filibuster.

Republicans have called on Democrats to address the debt limit using that same process, though there are disagreements between party leaders over how much time the maneuver could take ahead of the looming deadline.

Democrats have tried to insist Republicans work with them to raise or suspend the debt limit, pointing to the multiple instances both parties did so under previous administrations.

In her letter on Tuesday, Yellen sought to put pressure on lawmakers to act with haste to resolve the matter, warning of the dangers of waiting until the eleventh hour.

“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,” Yellen wrote.

“Failure to act promptly could also result in substantial disruptions to financial markets, as heightened uncertainty can exacerbate volatility and erode investor confidence,” she added.

—Updated at 10:16 a.m.