(Updates markets in final paragraph.)
Jan. 12 (Bloomberg) -- President Barack Obama formally notified Congress today that that the government needs another $1.2 trillion in borrowing authority.
The written certification to raise the debt ceiling to $16.394 trillion, part of an August agreement between the White House and Congress to raise the limit in three steps, starts a 15-day clock for lawmakers to consider and vote on a joint resolution disapproving of the increase. Obama has veto power over any disapproval resolution that clears both chambers.
The U.S. House is expected to vote on a resolution of disapproval on Jan. 18, said Laena Fallon, a spokeswoman for Majority Leader Eric Cantor, a Virginia Republican. The Senate is scheduled to return the following week.
The law calls for Obama to notify Congress when the debt came within $100 billion of the current $15.194 trillion limit.
While the threshold was reached Dec. 30, when the president was in Hawaii and Congress was on holiday break, Obama agreed to a request from congressional leaders to delay the notification request, ensuring the deadline for congressional action didn’t lapse before lawmakers returned to Washington.
A spokesman for 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.
The deficit in fiscal 2011 was $1.3 trillion and the White House budget office in September forecast it will be $956 billion in the current fiscal year.
Lawmakers rejected a proposal Obama made in September to trim the nation’s long-term deficit by $3 trillion beyond the $1 trillion that was agreed to as part of the deal to raise the debt ceiling. Administration officials said yesterday that Obama plans to reprise his deficit-reduction ideas as part of his 2013 budget.
They include raising taxes on the wealthiest Americans, cuts in Medicare and reductions in so-called mandatory programs such as farm subsidies.
The debt ceiling increase is to meet commitments already made by the government. The Treasury Department has been relying on accounting maneuvers, similar to the ones employed during the year’s earlier dispute to ensure that the previous $15.194 trillion limit wasn’t breached.
Since the budget law was approved, the debt limit has been raised twice, by a total of $900 billion. Under the new request, the limit would rise to $16.394 trillion, which the Treasury Department estimates will fund the government until late 2012.
In the last certification vote, the Republican-controlled House passed a resolution of disapproval, while the Senate, where Democrats hold a majority, didn’t.
The yield on the current 30-year bond rose one basis point, or 0.01 percentage point, to 2.97 percent at 5 p.m. in New York, according to Bloomberg Bond Trader prices. Ten-year yields rose two basis points to 1.92 percent.
--With assistance from James Rowley in Washington. Editors: Joe Sobczyk, Robin Meszoly
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