WASHINGTON, May 28. /TASS/. The agreement in principle reached by the White House and US Congressional Republicans prevented a catastrophic default and economic recession in the country, according to a statement by President Joe Biden released on Saturday.

"Earlier this evening (on Saturday - TASS), Speaker [of the House of Representatives Kevin] McCarthy and I reached a budget agreement in principle," Democratic President said, adding that "the agreement represents a compromise." The Washington Post newspaper reported earlier that the politicians discussed the agreement over the phone for 90 minutes.

"And, 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," Biden noted.

The agreement "is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone," the president said. "And, the agreement protects my and Congressional Democrats’ key priorities and legislative accomplishments," Biden added.

"Over the next day, our negotiating teams [of White House and Congressional Republicans] will finalize legislative text and the agreement will go to the United States House and Senate," he noted. "I strongly urge both chambers to pass the agreement right away," the head of the state concluded. McCarthy said earlier that the vote on the deal would take place on Wednesday, May 31.

The deal would suspend the $31.4 trillion debt ceiling until January of 2025. In exchange, non-defense discretionary spending would be capped at current year levels in 2024 and increased by only 1% in 2025, Reuters said. Defense expenditures will be increased in the period, according to the Washington Post newspaper.

The US administration has called on Congress in recent months to raise the national debt ceiling. Republicans, who are in control of the House of Representatives, are traditionally skeptical about allowing greater debt and are pushing for reducing government spending.

US Treasury Secretary Janet Yellen warned Congress earlier that June 5 was the deadline for debt ceiling to be raised. A default in the US if Congress fails to raise the debt ceiling, would be an economic and financial catastrophe, Yellen noted. Biden and Republicans’ leaders in Congress agreed on holding regular consultations to avoid it.