Washington is on the verge of a massive budget deal — here's what it would tackle

The contours of an emerging budget deal would provide Congress with a way out of most of the coming landmines ahead of the 2016 presidential election.

A US House of Representatives source and other sources familiar with the negotiations, cautioning that there is no final agreement at the moment, sketched out the details of the agreement to Business Insider on Monday.

The unveiling accord, which would last two years, would raise spending levels in equal amounts in defense and non-defense areas and avert a potential government shutdown in December. It would also tackle a glitch that could raise Medicare premiums for many seniors next year.

The New York Times reportedthat the deal would "call for cuts in spending on Medicare and Social Security disability benefits." Beneficiaries of the Social Security disability system face steep cuts next year unless Congress acts, as the fund is set to run dry. A source familiar with the negotiations told Business Insider that the deal would include "long-term entitlement reforms" to the Social Security disability program.

Attached to the deal would be separate legislation to raise the nation's debt limit well past the 2016 election. The US Treasury Department has warned that Congress needs to raise the debt ceiling by November 3 to avoid a potential first-ever default.

This agreement would allow both sides to claim victory on the issue: Democrats will claim that they got their desired "clean" debt-ceiling increase, while Republicans would be able to claim some concessions, since it would move along with the broader budget deal. House and Senate GOP leaders have privately been skeptical of whether they could garner enough Republican support to pass a "clean" debt-limit increase in either chamber.

The House source told Business Insider:

The emerging agreement would be for two years and achieves parity in the sequester relief between defense and non-defense investments.

The sequester package would also address the Medicare Part B issue, protecting millions of seniors from significant increases to their premiums and deductibles.

Additionally, attached to this package will be a CLEAN suspension of the debt limit until March 2017.

The source said that the announcement of a final agreement could come as soon as Monday night.

The agreement could be controversial among the Republican caucus in Congress and with the party's presidential field, which is set to take the stage Wednesday for their third debate of the cycle. A "clean" debt-ceiling increase, in particular, has no support from the party's influential conservative wing.

But House Speaker John Boehner (R-Ohio) has sought to "clear the deck" for his likely successor, Rep. Paul Ryan (R-Wisconsin), before Boehner leaves Congress at the end of the week.

The inclusion of cuts to Medicare and Social Security programs could also cause a revolt among the liberal wing of the Democratic Party.

US Senate Majority Leader Mitch McConnell (R-Kentucky) and Minority Leader Harry Reid (D-Nevada) said Monday that negotiations are ongoing.

"It is imperative that we avoid yet another manufactured crisis that threatens the American economy and jobs. But we must do it in a responsible manner," Reid said.