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U.S. Debt Nears $15.194 Trillion Ceiling

Damian Paletta The Wall Street Journal 01/13/2012 18:51
U.S. Debt Nears $15.194 Trillion Ceiling - economy - Business - USA

The Treasury Department has begun maneuvers to avoid hitting the debt ceiling, as the Obama administration waits for Congress to return from the holiday break before it can raise the federal borrowing limit.

The U.S. government was just a hair below the $15.194 trillion debt ceiling on Tuesday, $25 million shy of the limit Congress set last summer. President Barack Obama sent a letter to congressional leaders Thursday, saying the U.S. debt was within $100 million of the ceiling “and that further borrowing is required to meet existing commitments.”

Raising the debt ceiling another $1.2 trillion is procedurally simple but politically it is much more complex.

Last year, as part of the White House’s deal with Republicans to avert a potential default on the U.S. debt, both sides agreed to raise the debt ceiling $2.1 trillion, but to do it in two steps. So in August, they immediately raised the debt ceiling $900 billion.

To raise the ceiling another $1.2 trillion, which is what the Treasury Department now wants to do, Congress must first have the opportunity to formally disapprove or block the increase.

The vote of disapproval is expected to fail, but they need the opportunity to vote, which is something they can’t do while they are out of town. Congress has 15 days to vote to disapprove the increase once it is formally requested by the White House.