Following months of deeply polarized talks, the United States' bipartisan leading figures, US President Joe Biden and House Speaker Kevin McCarthy reached an agreement "in principle" to raise the $31.4 trillion debt ceiling, just days before the expected default.

US Treasury Secretary Janet Yellen said earlier that June 5 is the expected X-date when the federal government would have run out of money to pay its dues.

"And after weeks of negotiations, we have come to an agreement in principle," the House Speaker said.

It is an agreement "worthy of the American people," yet there is still “a lot of work to do”.

Biden described the deal as an "important step forward” that maintained Democrat's key agenda.

Read more: US debt default puts social security, healthcare, veterans at risk

“The agreement represents a compromise, which means not everyone gets what they want,” he said in a statement. “That’s the responsibility of governing.”

While the agreement draft is still being written to be presented to Congress and no official confirmation yet on the details has been announced, reports suggest that the ceiling would be suspended for two years but would be capped for non-defense discretionary expenses until January 2025 and increased by just 1 percent after that.

The deal's expiry date means that Congress would not have to vote on the issue again in 2024, ensuring that another debt-row crisis will not occur during the presidential elections of that year.

“It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone," the President stated. He added that the bill is being finalized and urged Congress to pass the legislation.

Read more: Failure to reach deal on US debt limit to result in contraction: IMF

The House Speaker revealed on his side that no new taxes will be introduced and that the bill includes “historic reductions in spending, consequential reforms that will lift people out of poverty and into the workforce.”

“I expect to finish the writing of the bill, checking with the White House and speaking to the president again tomorrow afternoon, and then posting the text of it tomorrow, and then we vote on it on Wednesday,” McCarthy said.

Republicans’ narrow majority in the lower chamber will force McCarthy to garner some support from Democrat figures to pass the proposal, given that the Congress so far has shown some bipartisan division on the matter.

While non-defense spending would be capped, the military budget is expected to be increased to around $885 billion, an 11% boost from the current budget.

McCarthy gave House members 72 hours to read the bill before he presents it to a vote on Wednesday. It is expected that it will be tough to secure support from Democrats and Republicans on the two extremes.

If the legislation is passed by the lower chamber, it will proceed to the Senate, where other challenges might slow down the adoption of the law.

Read more: US Treasury: debt default will make the world not invest in dollars