This was announced on Sunday by US President Joe Biden. finally the White House reached an agreement with House Speaker Kevin McCarthy to increase the debt limit for a period of two years.

“This agreement is good news for the American people, because it avoids what could be a catastrophic default on payments that would lead to an economic downturn, empty retirement accounts and millions of lost jobs,” the White House said in a statement.

Biden acknowledged that the agreement contains concessions from the Democrats, but preserves his government’s “key priorities”. “The agreement is a compromise, which means that not everyone gets what they want.. It is the responsibility of the government,” he said.

“This is an important step forward, Reduce Waste While Protecting Critical Programs for workers and develops an economy for all,” he added.

“In the coming days our negotiating teams will finalize the legislative text and the agreement will be submitted to the House of Representatives and the Senate,” he added.

The news comes after several tense days of contact between the Biden and McCarthy teams during the day on Saturday when The principle of the agreement has already been announced after a telephone conversation between them. The Republican urged parties to work on a vote on the text scheduled for Wednesday.

Although no details are known about what was agreed upon, according to McCarthy he is gathering “historic” government spending cuts and reforms that would “take people out of poverty and make them a labor force.” He also stressed that it does not contain new taxes or new government programs.