The Congressional Budget Office on Thursday projected that the U.S. Treasury would “most likely” run out of cash in early to mid-October unless Congress raises the debt ceiling.

The exact timing is unclear, the CBO said in a new report, as unpredictable swings in revenues and outlays may deplete funds more quickly or slowly than projected.

Treasury Secretary Steven Mnuchin has urged Congress to lift the debt limit before its August recess, though he has said that the nation can likely pay its bills if they wait to act until September.

ADVERTISEMENT

He has also warned that the closer the U.S. gets to breaching the debt ceiling, the more likely financial markets are to react unfavorably.

On Thursday, following the release of the CBO report, he again urged Congress to take action.

“For the benefit of everybody, the sooner that they do this the better,” he said at a White House briefing.

Technically, the Treasury is already past its debt limit.

On March 16, the debt ceiling was reset to the debt amount of $19.8 trillion, but no new borrowing authority was put in place to surpass it.

Since then, the Treasury has been taking “extraordinary measures,” legal workarounds to pay the bills without technically adding to the debt amount.

It is those measures that are expected to be exhausted in October.

“That would ultimately lead to delays of payments for government programs and activities, a default on the government’s debt obligations, or both,” the CBO report noted.

Republicans in Congress are wary of increasing the debt limit without tying it to some set of spending or regulatory reforms, a tactic they pursued under former President Obama. With President Trump in the White House and the GOP controlling both houses of Congress, however, the political calculus may be different.

Republicans will need Democratic support in the Senate to increase the debt ceiling, but Democrats have demanded that Republicans keep the measure free of “poison pill” riders or other policies.

“Our country was already facing daunting fiscal challenges and they just got even worse. It’s time to pass a budget that addresses the true driver of our debt – mandatory spending,” Rep. Dianne Black (R-Tenn.), chairwoman of the House Budget Committee, said in a statement released after the report.