Democratic and Republican leaders in the U.S. Senate announced Wednesday an "historic" accord to enable the country to reopen the federal government and avoid going into default less than 24 hours before the debt ceiling is to be reached.

Senate Majority leader Harry Reid (D-Nevada) said that the negotiations with the Republicans had been very difficult but that an agreement had ultimately been reached and it must now be voted on in both houses of Congress.

"Cooperation" with Senate Minority leader Mitch McConnell (R-Kentucky) was "essential" in achieving the Senate agreement, Reid said upon announcing the bipartisan accord before the full upper house.

The Senate proposal raises the debt ceiling until Feb. 7, 2014, and unblocks the federal budget so that the government - which has been partially shut down since Oct. 1 - can reopen until Jan. 15, thus giving Congress time to begin a debate on spending and deficit reduction.

The proposal establishes that a bipartisan and bicameral committee would negotiate a long-term budget agreement that would be put up for a vote in December, according to legislative sources.

The agreement reached in the Senate "will give stability" to the country and will serve as a starting point on the road to "fiscal sustainability," Reid said.

Meanwhile, Speaker of the House John Boehner (R-Ohio) said he would allow the lower chamber to vote on the measure, urged fellow Republicans to support it and said he would not block it.

"We fought the good fight; we just didn't win," Boehner told an Ohio radio station regarding recent GOP efforts to defund President Barack Obama's comprehensive health care reform and get deficit reduction concessions in exchange for funding the government and raising the federal borrowing limit.

The White House hailed the Senate accord to enable the country to avoid declaring a suspension of payments on its debts and obligations and to reopen the government, and the administration urged both chambers to approve it "as soon as possible" to end the fiscal crisis.

The drama playing itself out over the U.S. fiscal position became more acute Tuesday afternoon when credit rating agency Fitch announced it has put U.S. Treasury bonds on watch for a potential downgrade if the nation's $16.7 trillion debt ceiling is not raised. EFE