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Pelosi, Mnuchin reach 'near-final agreement' on budget, debt ceiling

House Speaker Nancy PelosiNancy PelosiOvernight Health Care: Moderna to apply for emergency use authorization for COVID-19 vaccine candidate | Hospitals brace for COVID-19 surge | US more than doubles highest number of monthly COVID-19 cases House Democrats urge congressional leaders to support .1B budget for IRS Bipartisan Senate group holding coronavirus relief talks amid stalemate MORE (D-Calif.) and Treasury Secretary Steven MnuchinSteven Terner MnuchinFinancial groups applaud Biden Treasury pick Yellen US sanctions Chinese company for conducting business with Maduro regime Monumental economic challenges await Biden's Treasury secretary MORE have reached a "near-final agreement" on a two-year budget deal, according to a source close to the talks. 

The emerging deal includes an increase in top-line defense and nondefense spending numbers for the 2020 and 2021 fiscal years, which are used to craft government funding bills. It would also suspend the debt limit until July 31, 2021.

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"The near-final agreement is a traditional bipartisan budget agreement where both sides will be unhappy with some aspects — a true compromise," the source said in an email to The Hill.

They added negotiators are "down to some technical language issues," with Mnuchin keeping President TrumpDonald John TrumpGeraldo Rivera on Trump sowing election result doubts: 'Enough is enough now' Murkowski: Trump should concede White House race Scott Atlas resigns as coronavirus adviser to Trump MORE and congressional Republicans updated on the progress in the talks.

The source said there is "parity" in the increase for defense and nondefense spending, but didn't immediately respond to questions about the details of the spending increases.

In a sign of retreat by the White House, the "near-final agreement" would include roughly $75 billion in offsets, or spending cuts and revenue raisers, to help pay for the deal. That's half of the $150 billion the administration had pushed to include in the agreement.

The White House reportedly sent a list of $574 billion in potential cuts to congressional leaders late last week, which was dismissed by Democrats as a negotiating tactic.

How to pay for the budget deal, and how much of it to pay for, was the final major sticking point for the negotiations, after talks bounced between Pelosi and Mnuchin for more than a week.

"That's what we're discussing. We're close. And I think there's a desire to come to an agreement from all of us. My worry here [is] ... if Mulvaney tries to be too hard on the offset side that we wouldn't come to an agreement," Senate Minority Leader Charles SchumerChuck SchumerOvernight Health Care: Moderna to apply for emergency use authorization for COVID-19 vaccine candidate | Hospitals brace for COVID-19 surge | US more than doubles highest number of monthly COVID-19 cases The five biggest challenges facing President-elect Biden Collins urges voters to turn out in Georgia runoffs MORE (D-N.Y.) told reporters last week, referring to acting White House chief of staff Mick MulvaneyMick MulvaneyMick Mulvaney 'concerned' by Giuliani role in Trump election case On The Money: Senate releases spending bills, setting up talks for December deal | McConnell pushing for 'highly targeted' COVID deal | CFPB vet who battled Trump will lead Biden plans to overhaul agency Consumer bureau vet who battled Trump will lead Biden plans to overhaul agency MORE.

The burgeoning agreement comes as lawmakers are going down to the wire to get a deal before they leave town for the August recess. The House will have only days to pass it before they leave town on Friday. The Senate will remain in Washington until Aug. 2.

Without an agreement, lawmakers were under pressure to hold a stand-alone vote on hiking the debt ceiling before they left for the August recess. They have until January to avoid the across-the-board budget cuts under sequestration.

The debt limit was exceeded earlier this year, and the Treasury Department is now taking steps known as "extraordinary measures" to prevent the government from going over its borrowing limit.

"Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes. As such, I request that Congress increase the debt ceiling before Congress leaves for summer recess," Mnuchin wrote in a letter to congressional leadership earlier this month.