U.S. debt deal reached...
Congressional leaders have reached an agreement on raising the US debt limit, President Barack Obama has announced.
The deal will cut about $US1 trillion ($A911.91 billion) in spending over 10 years, the president says.
"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 at the White House on Sunday night (Monday morning AEST).
Obama said the deal, which still needs to be approved by Congress, would establish a bipartisan committee of congress to report back by November with a proposal to further reduce the US deficit.
Congress must reach a deal on raising the $US14.3 trillion debt ceiling by Tuesday to avoid a government default.
Default "would have had a devastating effect on our economy," Obama said in the televised address.
No votes were expected in either house of Congress until Monday at the earliest, to give rank-and-file members time to review the package.
"We're not done yet: I want to urge members of both parties to do the right thing and support this deal with your votes over the next few days," Obama said, with time running short before the midnight Tuesday (1400 AEST Wednesday) deadline.
The US government hit its debt limit on May 16 and has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating normally - but can only do so through August 2.
Business and finance leaders have warned default would send crippling aftershocks through the fragile US economy, still wrestling with stubbornly high unemployment of 9.2 per cent in the wake of the 2008 global meltdown.
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