The White House and Republicans have reached an agreement in principle to raise the US debt ceiling and avoid a default after several weeks of tough talks.
President Joseph Biden described the agreement as a “compromise,” and House Speaker Kevin McCarthy said “historic spending cuts” were achieved, the BBC reported.
The US Treasury warned earlier that the country would run out of money to pay its bills on June 5 if no deal was reached.
Such a default would shake the US economy and disrupt global markets.
The US has to borrow money to finance the administration because it spends more than it collects in taxes.
Republicans are seeking spending cuts in areas such as education and other social programs in exchange for raising the $31.4 trillion debt limit.
The details of the new agreement have not been officially announced, but the media reports that non-defense government spending will remain at the same level for two years and then increase by one percent in 2025.
(Srna)