The first step would take place immediately, raising the debt limit by nearly $1 trillion and cutting spending by a slightly larger amount over a decade.
That would be followed by creation of a new congressional committee that would have until the end of November to recommend $1.8 trillion or more in deficit cuts, targeting benefit programs such as Medicare, Medicaid and Social Security, or overhauling the tax code. Those deficit cuts would allow a second increase in the debt limit, which would be needed by early next year. Real Clear Politics
Congress and Obama cannot make it until Jan 2012. $300B of that $1T will be spent immediately to cover internal borrowing over the last two months. That leaves $700B to last through the year when we run debts of $1.5T annually. However, input prices will have risen and taxes lower as a result of the current soft patch. Most government defense programs will see rising costs through the rest of the year due to revisions. Entitlements will see rising costs due to the revised inflation estimates. The federales will run out of money before Christmas.