President Obama this week is expected to ask Congress for a $1.2 trillion increase to the national borrowing limit. The increase would be the third and final allowed under an agreement struck between feuding Democrats and Republicans over the summer.
Speaking of the decision Treasury officials said the increase is necessary since the U.S. will be within $100 billion of the current set limit by Friday.
The debt limit is the amount of money the United States is allowed to borrow in order to finance its operations. The increase will provide the United States with a debt limit of $16.4 trillion.
Under the proposed debt limit increase officials believe the U.S. economy will have enough borrowing power to operate through 2012, just enough time to put the economy on course through the Presidential elections.
While Congress can reject the request President Obama has the power to veto its objection.
If Congress on the other hand doesn’t act by Jan. 14 the measure will automatically go into effect. Although a Congress denial is unlikely since the two sides already agreed in August to raise the limit by $2.1 trillion in three steps with a first going into effect in August for $400 billion, the second in September for $500 billion and now this final increase.
House Republicans did vote against the second increase but it was ultimately allowed to move forward with Senate approval. Each increase is able to take effect if just one chamber agrees with the proposal.
Do you think raising the U.S. debt limit once again is going to help stave off economic collapse or just add to the mounting number of expenses we already have to deal wtih.
[Image via Filip Fuxa / Shutterstock.com ]
