WASHINGTON (Reuters) – The White House warned on Friday that a failure by the U.S. Congress to extend the debt limit could plunge the economy into a recession and could lead to cuts in critical state services. 

  The government faces an October deadline on the debt limit, after which it may not be able to pay all of its bills without congressional approval. 

  President Joe Biden, a Democrat, and his aides have been trying to broker a deal with Republicans to resolve a showdown over raising the $28.5 trillion federal borrowing limit. 

  The administration is warning lawmakers that the country risks a new financial crisis and a default on its payment obligations. 

  "Economic growth would falter, unemployment would rise, and the labor market could lose millions of jobs," the White House said in a new fact sheet. 

  For months, Treasury Secretary Janet Yellen has urged Congress to act, saying cash and "extraordinary measures" being used to temporarily finance the U.S. government will run out in October. 

  But Republicans, who lost control of the White House in the 2020 election and do not hold the majority in the Senate or the House of Representatives, have balked and placed the potential crisis on Democrats' shoulders. 

  "It's absolutely unspeakable, unthinkable that we would allow the federal government to default on the obligations it has already made," White House economic adviser Brian Deese told MSNBC on Friday. 

  "We're confident that this is going to get done." 

  (Reporting by Susan Heavey, Steve Holland and Trevor Hunnicutt; Editing by Raissa Kasolowsky, Chizu Nomiyama and Andrea Ricci) 

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