With a deadline fast approaching, the US Congress must act to ensure the US does not default on its debt payments, Federal Reserve Chairman Jerome Powell said Wednesday.
Amid the budget debate in early 2018, Congress suspended the ceiling on US government debt until March 2, although the Treasury can manage the cash flow to put off the drop-dead date for some months.
The US ‘can never fail to pay all of our bills. That can never happen,’ Powell told a House committee. ‘That’s not something we can allow to happen.’
The US lost its coveted AAA debt rating in 2011, following battles among lawmakers in Washington over whether to lift caps on US sovereign borrowing, raising the likelihood of a US default. 
Powell said loss of that ‘important asset’ imposed a ‘significant cost imposed on the taxpayer’ through higher cost of the national debt after the rating was lowered to AA+.
When it is reintroduced on Saturday, the debt ceiling will be equivalent to the debt level as of January 31 – just under $22 trillion. 
With the government bonds issued in 2018, it is $1.5 trillion more than the previous limit. The federal government also plans to borrow at least $1 trillion this year.
Because the federal government traditionally runs a budget deficit, it has no choice but to borrow to finance government operations, including salaries, retirement benefits, social spending and other expenses already approved by Congress.
Powell said there is ‘uncertainty’ about when the government will run out of cash but could be late summer or early fall.
Treasury has said it is too early to determine when the drop dead date will be.
Under the administration of former president Barack Obama, Republicans repeatedly pushed the government to the verge of default, using the debt limit to force spending cuts.