After 16 days of a partial government shutdown, Senate leaders reached a deal on Wednesday to re-open the government and avoid default by extending borrowing authority into February, according to aides familiar with the negotiations.
"The compromise we reached will provide our economy with the stability it desperately needs," Senate Majority Leader Harry Reid, D-Nev., said shortly after noon on the Senate floor.
Votes in both the House and Senate are expected to begin this afternoon.
Under the agreement, the government would be funded through Jan. 15, and the debt ceiling would be raised until Feb. 7.
The Senate will announce a separate motion to instruct House and Senate negotiators on how to create a long-term blueprint for tax and spending policies over the next decade.
Senate Republicans are gathering to review the legislation, but lawmakers have given no signs that they will block the deal. The deal yields virtually no concessions to the Republicans, other than some minor tweaking to language regarding the income verifications for people obtaining insurance under the Affordable Care Act.
House and Senate leaders were negotiating how to maneuver the deal through both chambers and get it to President Obama's desk before the Oct. 17 deadline to raise the debt ceiling.
Both chambers would have to take special steps to get the legislation passed and to Obama before the government's ability to borrow money expires.
Passage of the bill would mean that the federal government can re-open, and hundreds of thousands of federal employees can return to work. It also means that the Department of Treasury can continue to borrow money in order to pay the government's bills.
"This is far less than many of us had hoped for frankly," Republican Mitch McConnell said. "But it's far better than what some had sought."
House Republicans were working on their own deal yesterday, but there were concerns that the GOP lacked the votes to get it passed.
The shutdown and debt ceiling fight began when House Republicans tried repeatedly to attach measures to a stopgap funding bill that would delay or defund President Obama's healthcare law. Those efforts were rejected by the White House and Senate Democrats.
Listen to Harry Reid and Mitch McConnell announce the Senate deal:
Sen. Ted Cruz, R-Texas, said he will not block a vote on the Senate deal to end the government shutdown that's also aimed at averting financial catastrophe.
The Tea Party favorite said he would vote "no" on the deal announced Wednesday, but he said he would not delay a final vote on the measure.
The White House announced it is pleased with movement toward ending the government shutdown and averting a debt crisis. Presidential spokesman Jay Carney urged lawmakers to act "swiftly" to approve a bipartisan compromise deal. He said President Obama looks forward to signing the bill once it clears the Senate and House. Carney stressed that the legislation removes the threat of "economic brinksmanship."
Listen to Jay Carney's statement: