 On July 31 , 2011 , President Obama and the leadership of both legislative chambers reached a deal on the debt limit legislation . The deal guaranteed $ 2 @.@ 4 trillion in immediate and eventual debt limit increases . It mandated $ 917 billion in spending cuts over ten years , of which $ 21 billion would be included in the FY2012 budget . It would then give Congress a choice between either accepting the recommendation of a Joint Select Committee on Deficit Reduction which would cut the deficit by $ 1 @.@ 2 – 1 @.@ 5 trillion through spending cuts and / or revenue increases , or accepting automatic budget cuts to national security funding ( including defense spending ) and to Medicare , which would start in the FY2013 budget . Congress would also be required to vote on a Balanced Budget Amendment . On August 1 , the Budget Control Act of 2011 passed the House 269 – 161 , with 66 Republicans and 95 Democrats voting against the bill . On August 2 , it passed in the Senate 74 – 26 , and was signed into law by President Obama the same day . August 2 was also the date estimated by the department of the Treasury that the borrowing authority of the US would be exhausted . 
