US President Barack Obama said US Republican and Democratic leaders have reached an agreement to raise the government’s debt ceiling and avoid a default

US President Barack Obama said in a televised address that US Republican and Democratic leaders have reached an agreement to raise the government's debt ceiling and avoid a default.

"I want to announce that the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default, a default that would have had a devastating effect on our economy," Obama said from the White House.

More than $2 trillion in spending cuts would be imposed gradually so they don't create a drag on the economy, he said.

The spending cuts would reduce government spending to the lowest level it has been since 1950s. He also said there would be no initial cuts to entitlement programs like Social Security and Medicare. But he said both could be on the table along with changes in tax law as part of future cuts.

"I want to urge members of both parties to do the right thing and support this deal with your votes over the next few days," Obama said.

Details of the framework will be presented to the congress Monday morning in the hopes of avoiding default before the Tuesday deadline, congressional leaders said.

House Speaker John Boehner said the pact "isn't the greatest deal" but lives up to the GOP's principles on taxes and spending.

The announcement had an immediate positive impact on Asian markets. In the Global Market, Equities rose while gold and the yen dropped on Monday, with investors cutting safety trades after Washington reached a last minute deal to escape default, though the top US credit rating could still be downgraded.