(Bloomberg, April 10) — On Tuesday the nonpartisan Congressional Budget Office echoed Janet Yellen’s warning about the possibility of the federal government running out of money if the debt ceiling is not raised.

The CBO noted that the Treasury plans to transfer $118 billion to the Highway Trust Fund on Dec. 15 — a move that follows the passage of President Joe Biden’s infrastructure package earlier this month.

“If the debt limit remained unchanged and if the Treasury made that transfer in full, the government’s ability to borrow using extraordinary measures would be exhausted soon after it made the transfer,” the CBO said. “In that case, the Treasury would most likely run out of cash before the end of December.”

Yellen earlier on Tuesday reiterated her call to lawmakers to address the debt limit, saying: “If we do not, we will eviscerate our current recovery.”

Congress approved a temporary increase to the federal debt limit last month. To avoid exceeding the limit, Treasury has used extraordinary measures over recent weeks. Though they have reached an agreement, Congressional leaders still need to find a more long-term solution.

Senate Republican leader Mitch McConnell said earlier Tuesday that the U.S. won’t default on its obligations and that he is in talks with Majority Leader Chuck Schumer on a path forward to extend the debt limit. Both leaders have not changed their positions that led to a deadlock over how they will move forward.

Yellen reiterated, in her appearance at the Senate Banking Committee Tuesday, that there are “scenarios” under which the Treasury would run out of cash after Dec. 15, but that she had a high degree of confidence the department had sufficient funds until that date.

Updates starting with the first paragraph.

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