U.S. Treasury Secretary Janet Yellen has warned that the nation will likely run out of money within three weeks unless Congress acts to avoid "serious harm" to the economy.
She said that the Treasury Department will be left with very limited resources and will likely exhaust its extraordinary measures if Congress fails to raise or suspend the debt limit by October 18th.
Speaking at a Senate hearing on Tuesday, Yallen expressed her deep concern over the looming debt ceiling.
"And if the debt ceiling were not raised, I think there would be a financial crisis and a calamity. And absolutely, it's true that the interest payments on the government debt would increase."
Yellen also cautioned that it was uncertain whether the Treasury would be able to meet the nation's financial commitments after that date.
Her remarks come a day after Senate Republicans blocked a bill that would fund the government and suspend the U.S. borrowing limit to pay for previously incurred government spending.
She said that failure to clinch a deal by mid-October would lead to the first default in U.S history one that would be disastrous for the American economy and global financial markets.
The Treasury had already enacted "extraordinary measures" to keep government funds flowing after the debt ceiling was reached over the summer.
But those measures will run out in about three week's time according to Yellen.
The projections from the U.S. Treasury Secretary raise concern that Washington could default on its debt in a matter of weeks if lawmakers fail to act over crucial funding measures.
Min Suk-hyen, Arirang News.