President Barack Obama late Sunday announced an 11th-hour deal with Congress to avert an unprecedented default on US debt payments, which would have sown chaos across the global economy.
With just two days left before the United States would run short of cash, Obama and his Republican foes said after round-the-clock negotiations that they had reached a framework for more than US$2.4 trillion in spending cuts.
"I want to announce that the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default, a default that would have had a devastating effect on our economy," Obama said.
As described by Obama and congressional leaders, the deal would raise the country's $14.3 trillion debt ceiling by at least $2.1 trillion. It would also make more than $2.4 trillion in spending cuts in two steps, including through a special new committee required to submit proposals by 23 November.
But the package still needs approval from Congress, which could vote as early as Monday. Leaders of the Democratic-held Senate and Republican-led House of Representatives were working to rally polarized lawmakers.
"To pass this settlement, we'll need the support of Democrats and Republicans in both the House and Senate. There is no way either party -- in either chamber -- can do this alone," said Democratic Senate Majority Leader Harry Reid.
House Speaker John Boehner called the plan a remedy to avert "a job-killing national default that none of us wanted."
But the plan faces opposition both from the conservative "Tea Party" movement, which favors sweeping spending cuts, and liberal Democrats who want taxes on the wealthy before any thought of cutting social welfare programs.