US President Barack Obama has asked the US Congress for another US$1.2 trillion in government borrowing, the third and final request under an August deal with lawmakers that averted a US default.
The president’s notification to congressional leaders on Thursday started a 15-day countdown for lawmakers to consider and vote on a joint resolution disapproving of the increase.
Republican Majority Leader Eric Cantor’s spokeswoman Laena Fallon said the US House of Representatives was expected to vote on a resolution on Wednesday. The US Senate, where the Democratic Party has a majority, returns to work the following week.
Under legislation passed on Aug. 2 after months of negotiations between the Obama administration and Republican lawmakers, the president has authority to veto any disapproval resolution that clears both chambers of Congress.
While the request to raise the debt ceiling is a formality laid out in last year’s agreement, the national debt will play into the presidential campaign and congressional races in November. After the economy and jobs, the federal deficit is among the top concerns mentioned by voters in polls.
A spokesman for Republican House Speaker John Boehner used the request to criticize Obama on the budget and the deficit.
“This request is another reminder that the president has consistently punted on the tough choices needed to rein in the deficit and protect important programs for American seniors from going bankrupt,” Brendan Buck said in an e-mail.
Lawmakers rejected a proposal Obama made in September to trim the nation’s long-term deficit by US$3 trillion beyond the US$1 trillion that was agreed to as part of the deal to raise the debt ceiling. Obama plans to revisit those plans as part of his budget for next year, administration officials said on Thursday.
Even with the deficit, there was record demand for US government bonds last year, pushing longer-maturity Treasuries to their best performance since 1995.
Although Standard & Poor’s stripped the US of its “AAA” credit rating on Aug. 5, after a protracted standoff over the debt ceiling, Treasuries due in 10 years or more returned 29 percent last year.
The law calls for Obama to notify Congress when the debt comes within US$100 billion of the current US$15.194 trillion limit. Although that threshold was reached on Dec. 30, when the president was in Hawaii and Congress was on a holiday break, Obama agreed to a request from congressional leaders to delay the debt notification, ensuring the deadline for congressional action did not lapse before lawmakers returned to Washington.
The debt ceiling increase is to meet commitments already made by the government. The US Department of the Treasury has been relying on accounting maneuvers, similar to the ones employed during the last year’s dispute, to ensure that the previous US$15.194 trillion limit was not breached.
Since the budget law was approved, the debt limit has been raised twice, by a total of US$900 billion. In the latest request, the limit would rise to US$16.394 trillion.