President Biden and House Speaker Kevin McCarthy reached a tentative agreement to raise the debt ceiling, ending a three-month-long standoff that threatened to trigger a US default.

The deal, if enacted, would boost the nation's borrowing limit for two years and take the volatile issue of America’s credit worthiness off the table until after the next presidential election.

The pact would also put in place what McCarthy described Saturday as "historic" spending limits that are also expected to be in place for the same period of time.

The announcement comes just days before the US government is expected to run out of money to pay all its bills. Treasury Secretary Janet Yellen said that could happen June 5.

Biden and McCarthy ironed out the final details during two phone calls Saturday. "We still have a lot of work to do but I believe this is an agreement in principle that is worthy of the American people," said McCarthy late Saturday.

Biden, in a statement, said the "agreement represents a compromise, which means not everyone gets what they want."

"It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone," he added.

But Wall Street can’t relax just yet. The leaders now have a difficult task of selling controversial provisions to skeptical lawmakers on both sides of the aisle so the agreement can be enacted into law. Deep reservations have been evident from both the left and from the right for weeks.

McCarthy only offered sparse details to reporters on Saturday, saying he wanted to talk with his members first.

President Biden also spoke Saturday with Senate Majority leader Chuck Schumer (D-NY) and House Minority Leader Hakeem Jeffries (D-NY), two men who will be tasked with lining up Democratic votes in the days ahead.

In a statement Saturday night, Maya MacGuineas of the Committee for a Responsible Federal Budget noted that the deal, if it passes, "would be the first major deficit-reducing budget agreement in almost a dozen years and would signal Washington is serious about making progress in addressing our mounting national debt."

Another issue addressed in the deal, according to McCarthy, is the controversial topic of work requirements in return for access to certain government programs.

The issue is a particularly sensitive topic for both parties and was a sticking point until the final hours. Liberal Democrats have focused intensely on the topic, arguing that any increased requirements will do little for the deficit and instead are needlessly cruel for the most vulnerable Americans.

On the other side of the aisle, conservative Republicans have demanded much deeper spending cuts in recent months than were reportedly agreed to in the final deal, leaving many McCarthy's most conservative members unlikely to support the bipartisan proposal in the days ahead.

Members of the conservative Freedom Caucus have repeatedly blasted the provisions as they have leaked out, with Rep. Chip Roy (R-TX) saying recently it “doesn’t sound like a deal that I can support.”

Speaker McCarthy said some of the bill remains to be written but he promised to post the entire bill tomorrow before a likely vote in the House of Representatives on Wednesday.

Biden said "this agreement is good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost."

Ben Werschkul is Washington correspondent for Yahoo Finance.

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