WASHINGTON: US Treasury Secretary Jacob Lew warned on Monday that the United States will exhaust its borrowing authority on Friday without action by Congress to lift the debt limit.

“Time is short. Congress needs to act to extend the nation's borrowing authority, and it needs to act now,” Lew said in prepared remarks at the Bipartisan Policy Centre, a Washington think tank.

“In just a matter of days, the temporary suspension of the debt limit will end, and the Treasury Department will have to start using extraordinary measures so the government can continue to meet its obligations,” he said.

Lew noted that the automatic reinstatement of the cap on borrowing after February 7 comes at the beginning of tax filing season, when tax refunds cause net cash outflows “that deplete borrowing capacity very quickly.”

“We now forecast that we are likely to exhaust these measures by the end of this month.”

On the February 7 deadline the borrowing cap will be locked at the total amount borrowed at that date. US debt currently stands at $17.3 trillion.

The Treasury chief welcomed recent congressional compromises that finally delivered a government budget after political stalemate over the issue forced a 16-day partial government shutdown in October.

But he warned Congress against waiting to raise the debt limit at the 11th hour, highlighting that a delay can jeopardize the credibility of the world's largest economy and roil financial markets.

He noted that in last year's political gridlock, consumer and business confidence dropped and investors “publicly questioned whether it was too risky to hold certain types of US government debt.”—AFP