US Senate leaders reach spending deal

The US Senate has reached a rare bipartisan deal on the budget, raising the debt limit.
The US Senate has reached a rare bipartisan deal on the budget, raising the debt limit.

The US Senate, in a rare display of bipartisanship, has reached a two-year budget deal to raise federal spending by almost $US300 billion, in an attempt to end the kind of squabbling over fiscal issues that has plagued Washington for years.

The agreement, announced on Wednesday by both the Republican and Democratic leaders of the Senate, would lift caps on defence funding and some domestic government spending.

Along with President Donald Trump's tax cuts approved by congress in December, the new round of spending would further add to the bulging federal deficit.

"This bill is the product of extensive negotiations among congressional leaders and the White House," Senate Majority Leader Mitch McConnell, a Republican, said on the Senate floor. "We worked hard to find common ground and remained focused on serving the American people."

The plan will need to be passed in the House of Representatives and the Senate, both controlled by Trump's fellow Republicans, before going to the president to sign.

But House Democrats have warned that they will not back the deal unless Republican Speaker Paul Ryan promises to advance separate legislation on immigration policy.

Chuck Schumer, the leader of the Senate Democrats, said the deal should break the cycle of partisan fights over spending.

"After months of fiscal brinkmanship, this budget deal is the first real sprout of bipartisanship. And it should break the long cycle of spending crises that have snarled this congress and hampered our middle class," Schumer said.

The higher defence spending should allow Trump to make good on a campaign promise for a US military build-up.

The White House said the deal also includes an extension, until March 2019, of the government's debt ceiling. The Treasury Department has been warning that without an extension in borrowing authority from congress, the government would run out of borrowing options in the first half of March.

The agreement also provides funds for disaster relief, infrastructure and programs addressing opioid abuse, the Senate leaders said.

Aside from the two-year deal, lawmakers were also trying to reach agreement by Thursday to avoid a shutdown and fund the government until March 23.

Immigration again emerged as a possible point of contention, putting the budget deal in jeopardy. Pelosi said she would oppose the accord unless Ryan promises to advance legislation to protect hundreds of thousands of young adult immigrants, known as "Dreamers", brought to the US illegally as children.