The deal being considered would increase funding for military and veterans assistance while keeping discretionary non-defense spending at current-year levels, said the official, who asked to remain anonymous because he was not authorized to speak about internal discussions.
A two-year extension would mean Congress would not have to address the cap again until after the 2024 presidential election.
bipartisan agreement
Each side will have to persuade enough members of their party in the closely divided Congress to vote in favor of a possible deal.
The Treasury Department had originally warned that it might be unable to service all of its obligations as soon as June 1, but it has also made plans to sell $119 billion worth of debt due on that date, suggesting to some market observers that this is not a set deadline.
The situation has unsettled investors and caused an $80 million increase in government borrowing costs, according to Treasury Under Secretary Wally Adeyemo.
Several credit rating agencies reported that the US rating was placed on review for a possible downgrade, which would increase borrowing costs and undermine the country’s position as the backbone of the global financial system.
Most lawmakers have left Washington for the Memorial Day holiday, but their leaders have warned them to be prepared to vote again when a deal is reached.
House leaders have said lawmakers will have three days to reflect on the deal before a vote, and any member of the Senate has the power to stall action for days. At least one of them, Republican Mike Lee, has threatened to do so.