"We have reached agreement to extend the debt ceiling through early December, and it's our hope that we can get this done as soon as today," Schumer said on the Senate floor on Thursday.
The deal reached between Schumer and Senate Republican leader Mitch McConnell would raise the statutory debt limit by $480 billion, which would allow the Treasury Department to meet obligations through December 3, Xinhua news agency quoted a Bloomberg News report as saying.
The deal came as Treasury Secretary Janet Yellen repeatedly warned that the US could default on its debt if Congress fails to raise or suspend the debt limit before October 18.
"I do regard October 18th as a deadline. It would be catastrophic to not pay the government's bills, for us to be in a position where we lack the resources to pay the government's bills," Yellen said on Tuesday in an interview with CNBC News.
The White House on Thursday called the short-term debt limit extension a "positive step forward", signaling support for the deal.
"And it gives us some breathing room from the catastrophic default we were approaching because of Senator McConnell's decision to play politics with our economy," White House Principal Deputy Press Secretary Karine Jean-Pierre told reporters.
"Addressing the debt limit shouldn't be a partisan football. This is about paying the debt that both parties have already incurred," Jean-Pierre said.
The Senate is expected to vote on the bill to extend the debt limit and it will require 60 votes to end debate on the legislation.
As part of a bipartisan budget deal enacted in August 2019, Congress suspended the debt limit through July 31.
After the debt limit was reinstated on August 1, the Treasury Department began using "extraordinary measures" to continue to finance the government on a temporary basis.
The debt limit, commonly called the debt ceiling, is the total amount of money that the US government is authorised to borrow to meet its existing legal obligations, including social security and medicare benefits, interest on the national debt, and other payments.