The cash clock is ticking, and the US Treasury Department has made its move. As the countdown to the potential depletion of the US government’s cash reserves intensifies, the Department plans to issue approximately $170 billion in Treasury bills. This sizable offering will take place just before the so-called “X-date,” when the government could run out of cash unless the debt ceiling is increased.

The upcoming Tuesday will see an auction for $119 billion worth of three-month and six-month bills. The sales will conclude by June 1, a key date that also marks the issuance of an additional $50 billion six-month bill specifically for cash management.

The gravity of the situation is palpable, but recent indications from lawmakers suggest progress toward an agreement to raise the debt ceiling. Nevertheless, the deadline looms, and there’s minimal room for error, especially given the cautious stance of some key conservatives.

According to Treasury Secretary Janet Yellen, the government’s cash runway could end as soon as June 5 without an increase in the debt limit. While the imminent auction of $170 billion in T-bills implies that there’s still some financial flexibility under the Treasury’s “extraordinary measures,” the government’s cash balance is dwindling.

As of the previous Thursday, the Treasury’s General Account held only $38.8 billion, a steep descent from $60.7 billion the preceding Friday and $140 billion two weeks prior. This account, crucial for servicing government bond debt and preventing a US default, also funds numerous other expenses like entitlements and federal employee salaries.

It’s a balancing act of revenue and expenses. As tax revenue flows in and payments head out, predicting the exact “run dry” date for the government’s money becomes a tricky task. Earlier estimates from Goldman Sachs analysts had pegged the X-date between June 8 and 9.

The repercussions of missing the X-date without a debt ceiling agreement are severe. It would plunge the US into default, triggering an unprecedented economic crisis with the potential to ignite a global recession. As per recent estimates from JPMorgan, the likelihood of exceeding the X-date without a deal is at 25% and rising.

So, the clock is ticking, the Treasury is playing its cards, and the global economic community is watching closely. Amidst these challenging times, let’s hope for a timely resolution and avoid a fiscal cliffhanger.