Treasury Secretary Steven Mnuchin warned on Friday that the U.S government could run out of cash by early September if Congress doesn't raise the debt ceiling for its August recess.

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"Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes," he wrote in a letter addressed to House Speaker Nancy Pelosi. "As such, I request that Congress increase the debt ceiling before Congress leaves for summer vacation."

Mnuchin, along with other members of President Trump's cabinet, met with congressional leaders on Capitol Hill this week to discuss the spending cap and debt ceiling -- potentially trying to tackle this issue before the recess begins at the end of July.

White House sources told Fox News that Democrats and Republicans are close to an agreement and might temporarily raise the debt limit for a couple of months. The spending cap does not have to be raised until mid-January.

Striking an agreement on spending levels could help Congress avert another government shutdown (even if the specifics of the deal haven’t been finalized) before the Sept. 30 deadline.

During a two-day appearance on Capitol Hill this week, Federal Reserve Chairman Jerome Powell urged Congress to raise the debt ceiling, while warning that the U.S. was on an “unsustainable path in the sense that spending is growing faster than the economy.”

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“It's essential that Congress raise the debt ceiling right away so the United States government can pay all of its bills when asked,” Powell said on Thursday before the Senate Finance Committee. “Any other outcome is unthinkable. We’ve always paid our bills, and it simply must happen that Congress raises the debt ceiling.”