A deal has been agreed between the White House and Republican politicians to avert the 'fiscal cliff', an administration source told Reuters.
President Obama and Senate Republicans have reached a deal that will see income taxes rise for the first time in more than two decades, thus averting the worst effects of the 'fiscal cliff', according to the Washington Post.
A possible deal between Senate Republican leader Mitch McConnell and Vice President Joe Biden to avert the 'fiscal cliff' would include a two-month delay in automatic federal spending cuts due to begin this week, according to Republican Senator John McCain.
McCain said the deal would include $24 billion in other spending cuts to cover the cost of the delay, and would also include a one-year extension of unemployment benefits.
The US Treasury has that said it will hit a legal limit on borrowing but will launching new measures to keep the nation from defaulting on its debt.
In a separate letter, Treasury Secretary Timothy Geithner told congressional leaders that the government would suspend some investments in pension and health benefit funds for federal workers to free up borrowing authority.
The suspension of the investments is part of a series of measures announced last week to keep the country from defaulting on its debt.