Debt ceiling increase

The new debt limit increase bill is essentially a modification of the McConnell plan. The new plan has a 3 step process for increasing the limit. First, the limit is increased by $400 billion. Second, the limit is increased by another $500 billion, subject to a "resolution of disapproval". Third, the limit is increased by $1.2 trillion (or $1.5 trillion if a balance budget amendment is submitted), again subject to a "resolution of disapproval". Since the BBA is unlikely to be submitted, this increases the debt limit by a total of $2.1 trillion, to $16.394 trillion.

So how long will the $2.1 trillion increase in the country's credit card last? Well, the $400 trillion will be used immediately, because the Treasury hasn't stopped spending, and instead has used accounting tricks, such as borrowing from Federal pension funds, to keep from exceeding the limit, and these funds will be replenished. In addition to this, I project they will spend an additional $300 billion by Sept. 30, the end of the fiscal year. The FY 2012 deficit should be about $1.2 trillion. So this is total of $1.9 trillion by 9/30/2012. At the rate of $100 billion per month, this means the country will bump up against the limit by 11/30/2012, so the new president will immediately be facing another debt crisis.

As a follow-up, the news states that "Just before 5p.m. Tuesday, President Obama sent a certification to Congress that, under the newly signed debt deal, triggers an automatic $400 billion increase in the debt ceiling."