Top White House officials and Republican lawmakers were nearing a deal Thursday evening that would raise the debt limit for two years while also limiting federal spending on all but the military and veterans, according to news reports.

If the deal can be agreed upon and enacted, it would raise the government's borrowing limit for two years, past the 2024 presidential election.

The compromise would let Democrats say they spared most domestic programs from major cuts and Republicans say they reduced some federal spending, according to The New York Times, which was the first to report on it.

Negotiators were talking Thursday evening and starting to draft legislative text, according to The Times.

"We've been talking to the White House all day, we've been going back and forth, and it's not easy," Republican House Speaker Kevin McCarthy told reporters as he left the Capitol on Thursday evening. "It takes a while to make it happen, and we are working hard to make it happen."

Earlier Thursday, President Joe Biden said that negotiations with Republican lawmakers to raise the U.S. government's borrowing limit and set future spending levels were going well, while assuring Americans the country will not default on its obligation to pay its bills.

White House budget negotiators continued to talk with representatives of Republican House Speaker Kevin McCarthy to sort out the last details of a deal, but no agreement was announced as lawmakers began to leave Washington ahead of the country's annual Memorial Day weekend.

The Republican-controlled House of Representatives is not scheduled to return until Tuesday - just two days ahead of June 1, the date Treasury Secretary Janet Yellen says the government could run out of cash to meet its obligations if the country's existing $31.4 trillion debt ceiling is not increased so the government can borrow more money. Both the House and Senate need to approve the debt limit increase before Biden can sign it into law.

The focus of the negotiations, Biden said, was on future spending, for the budget year starting in October and beyond. Republicans are trying to sharply curb spending, while the Democratic president and his congressional colleagues are trying to keep as much funding as possible in place for their legislative priorities.

At the U.S. Capitol, McCarthy said he had directed his negotiators "to work 24/7 to solve this problem.' He said that 'every hour matters' but that a deal could come together 'at any time.' He has repeatedly said the government cannot continue to run up massive deficits totaling about $1 trillion annually, adding to the long-term debt total.

'We have to spend less than we spent last year," McCarthy said. "That is the starting point."

Reporters encircle Speaker of the House Kevin McCarthy as debt limit negotiations continue at the Capitol in Washington, May 25, 2023. McCarthy adjourned the House for the Memorial Day weekend.

A key Democratic lawmaker, Representative Katherine Clark, characterized the negotiations as "a battle between extremism and common sense.' Republicans, she said, 'want the American people to make an impossible choice: devastating cuts or devastating debt default.'

The Fitch Ratings agency put the United States' AAA credit on 'ratings watch negative,' warning the government is at risk of a possible downgrade because of what it described as brinkmanship and political partisanship surrounding the debate over lifting the debt ceiling. The debt ceiling has been raised 78 times since 1960, including three times under Republican President Donald Trump.

Nonetheless, Fitch said it "still expects a resolution" in the current debt ceiling and budget negotiations.

A Treasury Department statement late Wednesday said the Fitch warning "underscores the need for swift bipartisan action by Congress to raise or suspend the debt limit and avoid a manufactured crisis for our economy."

A White House statement said the move by Fitch "reinforces the need for Congress to quickly pass a reasonable, bipartisan agreement to prevent default."

It remained unclear, however, exactly how Biden and Democrats pushing for only relatively modest cuts in government spending and Republicans pressing for steeper ones can get to an agreement, and to what extent the debt ceiling would be increased beyond its current level.

Republican Representative Marc Molinaro, right, waves next to Republican Representative Marjorie Taylor Greene as members of Congress leave the House for Memorial Day weekend, May 25, 2023, on Capitol Hill in Washington.

"I will not raise taxes," McCarthy has said, rejecting a White House proposal to increase taxes on the wealthiest U.S. taxpayers and large corporations. Nor, he said, would he allow a House vote on a measure to raise the debt ceiling without accompanying it with spending cuts.

"Sixty percent of Americans believe we should not raise the debt ceiling without cutting spending," he said.

White House press secretary Karine Jean-Pierre told reporters Wednesday the Biden administration says it is possible to reach a "reasonable bipartisan agreement that Republicans and Democrats in the House and the Senate can move forward with."

Jean-Pierre said the American people do not want what she called "devastating cuts" sought by Republicans.

"House Republicans have said we need to make these cuts in the name of fiscal responsibility and deficit reduction, but that's not what this is about. That's never been what this is about for them," Jean-Pierre said. "Because even as they fight to gut investments in hardworking families, they want to turn around and protect tax breaks skewed to the wealthy and corporations."

The government reached its existing borrowing limit in January, but the Treasury has adopted "extraordinary measures" since then to keep paying its bills. Without enough new tax receipts flowing into government coffers in the first days of June, the government would then face the difficult choice of which bills to pay.

Officials have warned that a default by the United States, the biggest global economy, could prove catastrophic, roiling the world's stock markets, forcing job layoffs in the U.S. and hurting the U.S. credit standing, resulting in higher interest rates for borrowers.