The U.S. Congress is set to take critical votes later Monday on a package of increases to the government borrowing limit and cuts to spending, after months of political bickering that pushed Washington to the edge of default on its massive debt.

In the Senate, Democratic Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell say they are optimistic about getting enough votes to pass the measure.

There may be more opposition in the Republican-led House of Representatives, where conservatives complain that the compromise does too little to cut spending.

Mr. Obama said Sunday the deal cuts about $1 trillion in spending over 10 years and sets up a bipartisan panel in Congress to consider up to $1.5 trillion in further reductions. He said that panel will consider all options, including tax increases and cuts to social welfare programs like Medicare. If the panel fails to reach agreement, then the deal requires automatic spending cuts.

The president called the proposal a compromise that lets the country avoid default, while making a serious down payment on deficit reduction. He said default would have a “devastating effect” on the U.S. economy.

The White House says the agreement would avoid the need for another vote on raising the the debt limit until 2013, providing greater “certainty” about the fragile economy. It also would delay the issue until after the next U.S. presidential and congressional elections.

After the agreement, stock markets made gains, oil prices rose, and gold dropped as markets rebounded from losses prompted by worries about a possible U.S. default.

All sides agreed on the need to cut spending and raise the debt ceiling. But they were deadlocked on what to cut and how fast those cuts should be made. Republicans and Democrats also split on the need for revenue increases.

Under the proposed agreement, the congressional panel must identify the additional budget reforms by November 23, and Congress must vote on the recommendations before the end of the year.

To encourage lawmakers to act by the deadline, the agreement includes the prospect of automatic cuts to social programs supported by Democrats and military spending favored by Republicans.

The White House said allowing the panel to consider reforms without a looming debt default will give lawmakers the ability to consider “essential reforms” without the political gamesmanship of the past few months.