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Countdown begins for Congress to raise the debt ceiling

The countdown has begun for Congress to raise the debt limit before the government runs out of money to pay its bills.

The limit went back into effect on Saturday, after Congress voted last year to suspend the debt limit until March 2nd.

But that doesn’t mean there is a crisis — yet.

Last month, Treasury Secretary Steve Mnuchin wrote a letter to Congress saying Treasury plans to use “extraordinary measures” to keep the government from defaulting on its obligations.

“Honoring the full faith and credit of the United States is a critical commitment. I encourage Congress to raise the debt limit,” said Mnuchin in the letter.

(Source: Committee For A Responsible Federal Budget)

‘Exactly where we should be six months out’

We don’t know exactly when Treasury could run out of cash. The Congressional Budget Office said it expects Treasury to run out of money this fall — near the end of this fiscal year or early in the next one. If Congress does not act by then, the U.S. could default on its debts.

Republican Congressman Patrick McHenry told Yahoo Finance lawmakers are “exactly where we should be six months out.”

Lawmakers will have their hands full at the end of September when Congress also must fund the government avoid a shutdown and strike a deal to avoid automatic spending cuts.

“I’m modestly optimistic that we’ll be able to wrestle this with less drama than what we’ve experienced politically over the last couple months,” said McHenry, ranking member on the House Financial Services Committee.

Interior of the Dome of the Capitol, 1865, seat of the United States Congress, Washington DC, District of Columbia. United States of America, 19th century. (Photo: DeAgostini/Getty Images)

Jessica is a D.C.-based reporter for Yahoo Finance. Follow her on Twitter.

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