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 Tuesday that 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. 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 afterthe presidential election.
Congress can reject the request, although Obama can veto their objection. If Congress doesn't act by Jan. 14, the increase will take place automatically.
The national debt has soared because the government has run record deficits over the past decade. The borrowed money has helped pay for two wars, stimulate the nation's economy after the worst recession since the Great Depression and finance broad tax cuts initiated during the Bush administration.
The enormity of the debt has also stoked intense partisan debate in Congress over spending and taxes. Polls show growing voter anger with the inability of both parties to reach solutions to the country's budget problems.
In August, Congress and the administration agreed to raise the borrowing limit by $2.1 trillion in three steps. The deal was reached hours before a potential default on the nation's debt and only after the parties also agreed to cut more than $2 trillion from the deficit over the next 10 years.
Still, the parties are at odds over how to reduce the deficit. In November, a bipartisan panel failed to meet a deadline to agree on $1.2 trillion of the cuts. That means automatic cuts of that amount will begin in January 2013 — a condition included in last summer's deal.
Republicans want to modify the timetable for the automatic cuts, largely because it includes steep cuts to the nation's defense budget.
Congress agreed to raise the debt limit 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.