The Obama administration will ask Congress to raise the nation's borrowing limit by $1.2 trillion this week, marking the third and final increase from a deal negotiated over summer. Treasury officials said the increase is necessary because the government will be within $100 billion of its current limit by Friday. The debt limit is the amount the government can borrow to finance its operations, and the latest increase will boost that limit to $16.4 trillion.
Officials say that should be enough to allow the government to keep borrowing until the end of 2012—just after the presidential election. Congress can reject the request, although Obama can veto its objection. If Congress doesn't act by Jan. 14, the increase will take place automatically. In August, Congress and the administration agreed to raise the borrowing limit by $2.1 trillion in three steps: by $400 billion in August and by another $500 billion in September. House Republicans voted against the second increase, but they failed to block it because the Senate approved it. The increases are scheduled to take effect unless both chambers vote against them. (Read more national debt stories.)