The leaders of the House and Senate Budget Committees announced Tuesday evening they have reached a two-year budget agreement, a step toward avoiding another federal government shutdown in January.

The deal, called the Bipartisan Budget Act of 2013, was announced ahead of the budget conference committee's Dec. 13 deadline and by House Budget Committee Chairman Paul Ryan, R-Wisc. and Senate Budget Committee Chairman Patty Murray, D-Wash.

If it's passed by Congress, the agreement would allow the House and Senate Appropriations Committees to work on spending bills at an agreed-upon level before the current continuing resolution expires on Jan. 15. The House is expected to take up the budget act first, and the Senate will follow. Ryan said that the intention to bring the agreement to the House floor by the end of the week.

The deal does not include tax reform. It would set overall discretionary spending for fiscal year 2014 at $1.012 trillion, about halfway between the levels in the House and Senate budgets, and a level slightly higher than that for fiscal 2015, Ryan and Murray said.

The budget act would provide $63 billion in sequester relief over two years. The sequester relief is divided evenly between defense and non-defense programs, according to a news release from budget committee leaders.

Additionally, the agreement would provide mandatory savings and non-tax revenue totaling about $85 billion. The deal would reduce the deficit by between $20 billion and $23 billion, the Congressional leaders said.

Ryan said at a press conference Tuesday evening that the agreement is a "step in the right direction."

"This agreement makes sure that we don't have a government shutdown scenario in January. It makes sure that we don't have another government shutdown scenario in October," Ryan said. "It makes sure that we don't lurch from crisis to crisis."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.