Updated

Treasury Secretary Henry Paulson on Monday said the United States may be unable to pay its bills this fall unless Congress raises the government's borrowing authority, now capped at $8.965 trillion.

Paulson, in a letter to lawmakers, estimated the government is likely to bump into the statutory debt limit in early October.

"Accordingly, I am writing to request that Congress raise the statutory debt limit as soon as possible," Paulson wrote. He did not say how much more borrowing authority the Bush administration needs.

Congress has already boosted the statutory debt limit several times during President Bush's tenure. The last time Congress upped the government's borrowing authority was in March 2006 when it agreed to raise the debt ceiling by $781 billion.

Boosting the debt limit is more a matter of politics than economics.

Economists doubt Congress will refuse to raise the limit. A federal default is considered unimaginable because it would rattle bond markets, force interest rates higher and shake the economy.

Democrats have blasted the administration for ratcheting up the government's borrowing needs, while they deal with bloated budget deficits; they contend the greater borrowing needs show Bush's fiscal mismanagement.

The administration, however, has defended the increases as essential to pay for wars in Iraq and Afghanistan and to cover other costs to keep the United States secure.

In the past, Treasury has resorted to numerous accounting maneuvers to pay its bills while the government waited for Congress to expand its borrowing authority. Paulson argued against being forced to use such measures, saying they "would create unnecessary uncertainty for the financial markets and result in costs to the government." Such actions, he said. "should be reserved only for extraordinary circumstances, and should be avoided."

Separately, the government expects to borrow $73 billion in the July-to-September quarter, which would be more than previously forecast, the Treasury Department said.

The new estimate is $31 billion higher than a projection made in April. The department partly blamed increased government spending for the new, larger quarterly borrowing projection. It comes as the department considers the government's financing needs, which it does on a quarterly basis.