Obama to ask Congress this week to raise debt ceiling by $1.2 trillion

The Obama administration will be asking Congress to increase the debt limit later this week, two senior administration officials have confirmed.

The White House is expected to ask Congress to raise the U.S. borrowing limit by $1.2 trillion. This would mark the third and final increase from the debt-ceiling deal that was reached over the summer by Congress and the administration. The agreement said that the borrowing limit would increase by $2.1 trillion in three steps.

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One senior Treasury official explained that the boost was essential because the U.S. would be within $100 billion of the current limit "by the end of the day on Friday."

"Assuming the projection is correct we anticipate that pursuant to the Budget Control Act, the president would submit a certification to Congress confirming that we are within $100 billion of the statutory debt limit," the official said.

The increase would help boost the U.S. borrowing limit to $16.4 trillion, the official said.

Congress — currently in recess — could reject the increase, but Obama could veto that objection, sources say.

Treasury officials said if a joint resolution of disapproval is not enacted, the debt limit is expected to be increased 15 days after Congress receives certification of the increase, on Jan. 14.

Congress won't be back in session until Jan. 17.

After a heated debate about the debt ceiling and a partisan stalemate on Capitol Hill this summer, the House brought up a resolution that disapproved of another $500 billion increase in the debt ceiling in September.

At the same time, the Senate, with its Democratic majority, refused to block the increase.

Treasury officials say they anticipate the debt limit will not be reached again until late 2012. But they said it's too early to say if would happen before the 2012 elections. 

Officials said Treasury would be able to invoke extraordinary measures to extend borrowing authority beyond the next elections.

—This story was posted at 11:59 a.m. and updated at 1:53 p.m.