Reuters reported yesterday that President Barack Obama will ask Congress for yet another increase in the nation’s borrowing limit — this time a crisp $1.2 trillion, which raise the debt ceiling to $16.394 trillion:
The White House plans to ask Congress by the end of the week for an increase in the government’s debt ceiling to allow the United States to pay its bills on time, according to a senior Treasury Department official on Tuesday.
The approval is expected to go through without a challenge, given that Congress is in recess until later in January and the request is in line with an agreement to keep the U.S. government funded into 2013.
The debt is projected to fall within $100 billion of the current cap by December 30, when the United States has $82 billion in interest on its debt and payments such as Social Security coming due. President Barack Obama is expected to ask for authority to increase the borrowing limit by $1.2 trillion, part of the spending authority that was negotiated between Congress and the White House this summer.
Under the agreement struck in August during the showdown over the government’s debt limit, the cap is automatically raised unless Congress votes to block the debt-ceiling extension. Lawmakers have 15 days within receiving the request to vote, which is largely symbolic because the president can veto it and Congress would be unlikely to muster the two-thirds majority to override it. Moreover, the U.S. House of Representatives also is in recess until January 17.
That $1.2 trillion increase in the debt ceiling is roughly equal to the spending cuts that came as part of the debt ceiling agreement that took place during the summer. Unfortunately, the “spending cuts” aren’t really spending cuts. They’re largely reductions in the rates of spending increases.
So, even though Washington tells us the debt ceiling fix was needed to stave off an economic disaster, all we’ve really done is given ourselves a temporary repreve from becoming like Greece or other countries in Europe dealing with a debt crisis.