President Donald Trump and US congressional leaders have reached a deal on a two-year extension of the debt limit and federal spending caps that would avert a feared government default later this year but add to rising budget deficits.
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"I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy," Trump said on Twitter.
Schumer and Pelosi promptly issued a statement confirming the agreement, saying the measure would be voted on "swiftly" in the Democratic-led House of Representatives.
The Republican-led Senate must also pass the measure before it can be signed into law by Trump.
Pelosi has been pushing to win passage by this week, before the start of a long summer recess that extends to September 9.
Under the agreement, which was the result of weeks of closed-door negotiations, the Treasury Department's borrowing authority would be extended through July 31, 2021.
Without legislation, Treasury could bump up against its borrowing limit before September 9, according to some recent estimates, potentially triggering a default on some debt.
The pact would also set overall spending levels for the next two years on both defence and non-defence programs operated by the federal government.
Under the deal, spending on those "discretionary" programs would rise to $US1.37 trillion in the fiscal year starting October 1, up from $US1.32 trillion this year.
In fiscal 2021, spending would rise at a slower pace, to $US1.375 trillion.
McConnell, a Republican, praised the pact, saying it "secures the resources we need to keep rebuilding our armed forces," while not specifically mentioning rising non-defence outlays.
Even with an agreement enacted into law, Congress must pass spending bills to implement it. Lawmakers face a Sept. 30 deadline - the end of the current fiscal year - to pass those bills or temporarily extend current spending while new legislation is brokered.
Last December, Republican leaders thought they had a deal with Trump on legislation funding government activities for the current fiscal year. At the last minute, he demanded more money so he could build a wall along the US-Mexico border to keep immigrants from entering the country illegally.
Democrats objected to border wall funding and the breakdown led to record-long, partial government shutdowns until Trump relented.
Australian Associated Press
