US President Barack Obama hailed the budget deal, which if approved by the Congress, would avoid government shutdown for at least two years.
"Today's bipartisan budget agreement is a good first step," Obama said of the deal that was announced after weeks of negotiations between the Republican and Democratic lawmakers.
"This agreement replaces a portion of the across-the -board spending cuts known as 'the sequester' that have harmed students, seniors, and middle-class families and served as a mindless drag on our economy over the last year," Obama said.
"It clears the path for critical investments in things like scientific research, which has the potential to unleash new innovation and new industries. It's balanced and includes targeted fee increases and spending cuts designed in a way that doesn't hurt our economy or break the iron-clad promises we've made to our seniors," he said.
Announcing the budget deal, Republican Congressman Paul Ryan said this reduces the deficit by USD 23 billion.
"And it does not raise taxes, and it cuts spending in a smarter way," he said.
"I think this agreement is a clear improvement on the status quo. This agreement makes sure that we don't have a government shutdown scenario in January. It makes sure we don't have another government shutdown scenario in October. It makes sure that we don't lurch from crisis to crisis," Ryan said.
Democratic Senator Patty Murry said the deal puts jobs and economic growth first by rolling back sequestration's harmful cuts to education, medical research, infrastructure investments and defense jobs for the next two years.
"This deal builds on the USD 2.5 trillion in deficit reduction we have done since 2011 and continues the precedent that we set in the fiscal cliff deal, that sequestration shouldn't be replaced with spending cuts alone," he said.
"This bipartisan deal will help millions of Americans who are wondering if they were going to keep paying the price for DC dysfunction," Murry told reporters at a press conference.
House Majority Leader Eric Cantor said this agreement is a step forward consistent with prior Republican attempts to replace the sequester's indiscriminate across-the-board cuts.
"The agreement protects our national security and improves our defenses in a world that remains very dangerous, especially as Iran marches towards nuclear capability," he said.
However, several lawmakers were quick to oppose the deal.
Senator Marco Rubio said this budget deal makes it harder for more Americans to achieve the American Dream.
"Instead, this budget continues Washington's irresponsible budgeting decisions by spending more money than the government takes in and placing additional financial burdens on everyday Americans," he said.
Senator Mark R Warner, a member of the House-Senate budget conference committee, hoped that this compromise allows to step away from the irrational harm of sequestration.
"This is a productive step forward that avoids another shutdown and allows the government to operate with more predictability over the short term," he said.
"Tonight's agreement represents a step toward enacting a budget for the American people and preventing further manufactured crises that only harm our economy, destroy jobs, and weaken our middle class," Congresswoman Nancy Pelosi, a Democratic leader, said.
"What this is, is an agreement on less than 10 per cent of that sequester money, that USD 1.2 trillion. The savings are maintained and what we've always said was we need the savings in the mandatory, the entitlement, the auto pilot spending arena," House Majority Leader Cantor, said.