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U.S. says could quickly run out of cash without higher debt cap

Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. REUTERS/Rick W
Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. REUTERS/Rick W

WASHINGTON (Reuters) - The Obama administration warned on Wednesday that it would likely begin defaulting on its obligations within a month of February 7 if Congress does not raise a cap on government borrowing by then.

Obama signed into law a bill last month that suspended a $16.7 trillion cap on the national debt until February 7, when it will reset to whatever level the debt has reached.

Absent a decision to raise it again, the Treasury Department has tools known as "extraordinary measures" to manage its cash a little longer before it starts missing payments.

"There's no indication right now that extraordinary measures would last longer than a month," a Treasury official said.

(Reporting by Jason Lange; Editing by Sandra Maler)

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