The White House and congressional leaders reached a two-year budget deal overnight that would lift mandatory sequestration cuts on both defence and domestic spending.
The deal will also raise the federal debt ceiling, averting a fiscal standoff as the Republican-led U.S. House of Representatives prepares for new leadership.
A White House official said on Tuesday the compromise deal would protect Social Security and Medicare beneficiaries from cuts and urged members of Congress from both parties to pass it.
“It’s a responsible agreement that is paid for in a balanced way by ensuring that hedge funds and private equity firms pay the taxes they owe.
“The agreement cuts billions in wasteful spending,” the official said in a statement.
House Speaker John Boehner and congressional leaders raced to finalise the deal which included extending the debt ceiling until March 2017 before he transfers power to his expected successor, Paul Ryan.
As part of the deal, congressional leaders proposed to sell 58 million barrels of oil from U.S. emergency reserves over six years starting in fiscal 2018.
The proceeds will help pay for an end to mandatory spending cuts, according to a copy of the bill posted to a congressional Website.
If successful, the agreement would mark a final act for Boehner to clear some politically divisive legislation as Ryan takes over as speaker.
He becomes speaker if a majority of the House votes to put him in the top job in an election set for Thursday.
Boehner is to retire from Congress on Friday.
Central to the pact is the easing of across-the-board budget caps which would allow an additional 80 billion dollars in spending over two years, split evenly between military and domestic programs.
About $50 billion in added spending would come in fiscal 2016 which started on October 1 and $30 billion would be added to the fiscal 2017 budget.
