US congressional leaders announce top-line spending deal

WASHINGTON (Reuters) - Top U.S. congressional leaders on Sunday agreed on a $1.6 trillion top-line federal spending level in a deal aimed at averting a partial government shutdown later this month, Republican U.S. House of Representatives Speaker Mike Johnson said.

The top-line figure includes $886 billion for defense and $704 billion for non-defense spending, Johnson said in a letter to lawmakers on Sunday. The defense portion had already been signed into law by President Joe Biden last month through the defense spending bill.

The non-defense discretionary funding will "protect key domestic priorities like veterans benefits, healthcare and nutrition assistance" from cuts sought by some Republicans, Democratic Senate Majority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries said in a joint statement.

Congress was scheduled to return to Washington this week to tackle Jan. 19 and Feb. 2 deadlines for settling government spending through September, amid Republican demands to reduce fiscal 2024 discretionary spending below caps agreed to in June.

Biden said on Sunday the deal moved the country one step closer to "preventing a needless government shutdown and protecting important national priorities."

"It reflects the funding levels that I negotiated with both parties," Biden said in a statement after the deal was announced.

(Reporting by Kanishka Singh and Jason Lange; Editing by Caitlin Webber and Bill Berkrot)