WASHINGTON —  White House officials and congressional leaders have reached a deal to lift the nation’s debt limit and boost federal spending by about $320 billion over limits set in a 2011 budget law.
President Trump announced the agreement with the four congressional leaders on Twitter, calling it a “real compromise in order to give another big victory to our Great Military and Vets!”

The deal, assuming it moves forward, would prevent the country from defaulting on its debt — calamitous for the financial markets — and raise the nation’s borrowing capacity for about two years.

The plan would also reverse massive, automatic spending cuts to federal programs — known as the sequester, according to congressional sources.

Trump spoke positively about it earlier Monday.

“We’re having very good talks with the speaker of the House, Nancy Pelosi,” Trump told reporters at the White House while speaking with Pakistani Prime Minister Imran Khan. He also said talks were “doing pretty well on a budget.”

The agreement, crafted largely between Pelosi (D-San Francisco) and Treasury Secretary Steven T. Mnuchin, would mark an end to cuts mandated under the bipartisan 2011 budget deal. The annual cuts — which expire in 2021 — were designed to control federal spending by requiring painful reductions for both sides.

But they never took full effect and now they probably never will. Lawmakers in both parties, concerned about the effect on domestic and defense programs, have reversed them in every budget deal reached since 2013.

Conservatives are likely to balk. The deal could amount to a significant blow to acting Chief of Staff Mick Mulvaney, who has advocated for limited federal spending since he was in Congress. He has been largely sidelined in the talks by congressional Republicans who don’t like the spending caps.

The White House originally wanted to offset the new spending with about $150 billion in cuts. But the impending deal would be offset by only about $75 billion, according to a congressional aide. Negotiators are considering extending automatic cuts to Medicare and new Customs and Border Protection fees to help pay for it.

Mnuchin and Pelosi have been negotiating a deal for several weeks, with a significant uptick in phone calls in recent days, according to an aide familiar with the conversations.

House leaders are racing to complete the agreement before House members depart Washington at the end of the week until after Labor Day. The Senate is slated to leave a week later.

The nation is expected to hit its debt limit — the maximum amount Congress has authorized the country to borrow — as early as the second week of September, according to Mnuchin. That’s just as lawmakers are returning from their August break and not enough time to authorize an extension.

If the deal is not approved by Congress this week, lawmakers have floated the idea of a short-term extension to prevent the country from defaulting on its debt while Congress is away from Washington.

Trump has indicated that he didn’t want to use the debt limit as leverage against congressional Democrats.

“It’s a sacred element of our country,” he said Friday. “We can never play with it.”

However, Trump suggested in 2013 that Republicans use the debt ceiling as political leverage against President Obama.

Budget hawks were immediately skeptical of the early details of the plan. The Committee for a Responsible Federal Budget warned that it could result in $2 trillion in new debt over the next decade.

“As we understand it, this agreement is a total abdication of fiscal responsibility by Congress and the president,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “It may end up being the worst budget agreement in our nation’s history, proposed at a time when our fiscal conditions are already precarious.”