U.S. Republican and Democratic leaders announced a bipartisan deal on Wednesday to end a government shutdown and raise the country's debt limit.
The agreement calls for the reopening the federal government with a temporary budget until Jan. 15 and to extend U.S. borrowing authority until Feb. 7, Democratic leader Harry Reid announced, hours before Washington hit its limit.
President Barack Obama has welcomed the agreement and urged Congress on Wednesday for a swift approval of the deal.
White House spokesman Jay Carney said Obama was grateful to the leaders of the Senate for working together and wanted lawmakers now to ensure “the government reopens and the threat of default is removed,” according to Agence France-Presse.
The Senate leaders were leading the negotiations to prevent a potential devastating debt crisis following a collapsed bid that divided the House of Representatives.
Senate approval of the deal still would have to be ratified by the Republican-controlled House, where a core Tea Party faction has until now vehemently resisted compromise, according to AFP.
On Thursday the United States is expected to hit the limit of its $16.7 trillion borrowing authority, raising the threat of a default with potentially catastrophic effects on the world economy.
U.S. federal agencies had been ordered to shut down at the beginning of October after Congress missed a deadline to pass a budget.
The government headed toward the shutdown over Republican efforts to halt Obama's healthcare reforms as last minute maneuvers failed to resolve deep differences between Democrats and Republicans.
Around 800,000 government workers have been on unpaid leave.