A bipartisan groups of negotiators announced Tuesday that two months of talks have finally produced a budget they could all agree on.
House Budget Committee Chairman Paul Ryan said the deal with his Senate counterpart, Patty Murray, would set spending levels, reduce the deficit, and relieve some of the arbitrary, forced spending cuts - known as sequestration.
The pair found common ground just days before a Friday deadline to settle the matter.
"We have broken through the partisanship and the gridlock," Murray said.
Ryan said the deal was "a clear improvement" over the status quo.
"This agreement makes sure that we don't have a government shutdown scenario in January. It makes sure we don't have another government shutdown scenario in October. It makes sure that we don't lurch from crisis to crisis," the Wisconsin Republican said.
President Barack Obama called the development a good first step.
OutFront: John King, CNN contributors Reihan Salam and John Avlon.