US government faces risk of Treasury running out of money

"Based on updated projections, we could run out of money in early September, before Congress returns. Therefore, I am recommending that Congress raise the debt ceiling before the summer recess," US Treasury Secretary Steven Mnuchin wrote in a letter to House Speaker Nancy Pelosi on July 12.

The US Treasury, which is facing a growing budget deficit due in part to President Donald Trump's 2017 tax cuts, said it only has enough cash until the fall.

Pelosi and Mnuchin have spoken three times this week to begin negotiations on the budget and the debt ceiling. The new projections are expected to boost efforts to raise the debt ceiling before Congress begins its six-week recess on July 26.

Pelosi told reporters that she had not yet read Mnuchin's letter to Capitol Hill, but that she had been aware of it. On July 11, she called on Congress to act this month to raise the debt ceiling.

Congressional leaders acknowledge that waiting until September to raise the US debt ceiling would raise the risk of an unprecedented default. Republicans, Democrats and the Trump administration have intensified negotiations this week, with all sides insisting they will reach a deal.