WASHINGTON - President Barack Obama's top ally in the Senate has signed on to a long-delayed agreement to raise the government's borrowing cap and cut spending - subject to approval by his fellow Senate Democrats.
A spokesman for Majority Leader Harry Reid says the Nevada Democrat supports the measure. He's the first top congressional leader to announce support.
Racing to avoid a government default, President Barack Obama and Republican congressional leaders reached urgently for a compromise Sunday to permit vital borrowing by the Treasury in exchange for more than $2 trillion in long-term spending cuts. Senate Republican Leader Mitch McConnell said the two sides were "really, really close" to a deal after months of partisan fighting.
Even so, there was no confirmation from the White House, McConnell or House Speaker John Boehner's office of a final accord two days before a deadline to raise the federal debt limit and enable the government to keep paying its bills.
As contemplated in talks that McConnell and Vice President Joe Biden were negotiating, the federal debt limit would rise in two stages by at least $2.2 trillion, enough to tide the Treasury over until after the 2012 elections.
Big cuts in government spending would be phased in over a decade. Thousands of programs - the Park Service, Internal Revenue Service and Labor Department accounts among them - could be trimmed to levels last seen years ago.
No Social Security or Medicare benefits would be cut, but the programs could be scoured for other savings. Taxes would be unlikely to rise.
Any agreement would have to be passed by the Democratic-controlled Senate and Republican-controlled House before going to the White House for Obama's signature. With precious little time remaining, both houses were on standby throughout the day, and Speaker John Boehner was in his office.
Without legislation in place by Tuesday, the Treasury will not be able to pay all its bills, raising the threat of a default that administration officials say could inflict catastrophic damage on the economy.