Treasury Secretary: Once again the U.S. is about to hit the debt limit

© J. Scott Applewhite, AP

Treasury Secretary Jacob Lew told Congress on Friday that he'll once again have to take measures to keep the federal government under the legal debt limit after a suspension of the limit expires Sunday.

Beginning Monday, Lew said the Treasury Department will take "extraordinary measures" to keep the government from defaulting on its debt. Those include a halt to new investments in federal employee pension funds, a moratorium on deposits from state and local governments, and drawing down a $23 billion currency stabilization fund.

Lew did not say how long those measures would last. But the Bipartisan Policy Center, which tracks the finances underlying the national debt, estimates that the government will run out of borrowing ability completely sometime between Oct. 1 and Dec. 31.

Since 1917, Congress has set an overall limit, or debt ceiling, to the amount that the Treasury can borrow. But after a number of high-stakes battles over raising the debt limit in recent years, Congress simply suspended the law.

The latest suspension expires Sunday, resetting the new debt limit at the current level of about $18.1 trillion.

Lew specifically ruled out other alternatives — like selling off government assets in what Lew called a "fire sale" — to stay under the debt limit.

"Selling the nation's gold to meet payment obligations would undercut confidence in the United States both here and abroad, and would be extremely destabilizing to the world financial system," Lew said.