(Bloomberg) -- The amount of money the US government has to pay its bills plunged to the lowest since 2017, posing a risk the administration will run out of funds by early next month if the statutory debt limit isn’t raised or suspended before then, even as an agreement enters its final stages. 

The Treasury’s cash balance fell to just $37.4 billion on Tuesday, according to data published Wednesday. That more that reverses the previous day’s bounceback, which saw it jump to $54.5 billion, and takes the Treasury coffers below the half-decade low of $38.8 billion reached on Friday. The Treasury’s bank account has been under downward pressure recently because of measures being taken to avoid breaching the $31.4 trillion debt cap.

The drop came even as President Joe Biden expressed confidence lawmakers would take a key step toward raising the US debt ceiling, ahead of a House vote to advance his budget deal with Speaker Kevin McCarthy. The House has scheduled a floor vote on the budget deal for Wednesday evening in Washington. The agreement, announced over the weekend, includes two-year limits on federal spending as a condition of suspending the debt ceiling until 2025. 

However, until the agreement is enacted by Congress and signed into law the administration must continue to manage its borrowing and cash appropriately.

As part of that, the Treasury announced Wednesday that it is planning to sell an unusually short-dated bill Thursday as it seeks to maneuver around the strictures of the debt ceiling. The department also announced the availability of $1.9 billion in so-called extraordinary measures, from a complex debt-swap maneuver with the Federal Financing Bank — a decades-old agency that has its own borrowing authority.

Ebbing Concern

Investor concerns around the US debt ceiling ebbed as the deal headed toward a vote in the House of Representatives after clearing a crucial procedural hurdle.

The cost of insuring US sovereign debt against default via derivatives has tumbled. At one point this month it exceeded levels on the bonds of many emerging markets with credit ratings well below that of the world’s biggest economy. Yields on Treasury bills maturing in early June — when Treasury Secretary Janet Yellen has said her department risks running out of cash — also extended their decline for the most part amid optimism around the agreement to avoid breaching the $31.4 trillion debt limit.

(Updates with note on extraordinary measures, in paragraph before ‘Ebbing Concern’ subheadline. A previous version of this story was corrected to amend the timeframe of the proposed ceiling suspension.)

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