"It will allow us to avoid default, it will allow us to pay our bills, it will allow us to start reducing our deficit in a responsible way," Obama said.
In Washington D.C., weeks of bickering and finger-pointing about the debt limit could come to an end Monday. Leaders in the House of Representatives and Senate are working right now trying to round up the votes to pass the deal before Tuesday.
Raising the debt limit is something previous presidents have done multiple times. The hang up over the past few weeks was a debate over differences in cuts and revenue.
While Senate leaders were seen smiling Sunday, Obama took on a much more serious tone as he announced the deal on national television: "Is this the deal I would have preferred? No. I believe we could have made the tough choices on entitlement reform and tax reform right now."
The debt plan calls for increasing the debt ceiling up to $2.4 trillion through the next presidential election, and $1.2 trillion dollars in spending cuts over the next 10 years.
"The result would be the lowest level of annual domestic spending since Dwight Eisenhower was president," Obama said.
But Obama says it is the second part of the deal that is the so important. It establishes a new bipartisan congressional committee to recommend additional deficit reduction of up to $1.5 trillion. An up or down vote is required by November; if not, automatic cuts will kick in. Obama says at that stage, everything is on the table, including tax increases and cuts to entitlement programs.
"Despite what some Republicans have argued, I believe that we have to ask the wealthiest Americans and biggest corporations to pay their fair share and give up tax breaks and special deductions, and despite some of what people in my own party have said, I believe we will have to make some adjustments to things like Medicare," Obama said.
While Illinois Congresswoman Jan Schakowsky is against any cuts to Medicare or Social Security, she strongly supports tax increases for the wealthy.
"I've introduced a tax bill, Fairness in Taxation Act, that would raise the taxe, starting at a $1 million -- the tax brackets -- going up to $1 billion, because there are people in this country that have made $1 billion, most of them paying a lower tax rate than you do," Schakowsky said.
Since the deal has no tax increases, Republican leaders are urging their members to vote for it. Illinois Sen. Mark Kirk said in a statement, "This deal is a balance of immediate cuts and a promise of long term reforms, coupled with a strong backstop."
Illinois Republican and Tea Party Congressman Joe Walsh says he will vote the plan down.
"This is a good little step, but when you talk about the way we are bankrupting future generations, this plan does nothing to address that," Walsh said in a phone interview with ABC7.
Walsh has said multiple times he did not come to Washington to compromise. Although, he predicts the House will pass the deal.
Schakowsky says she is reviewing the plan before making any decisions about voting.
If the deal does not pass by Tuesday, the U.S. Treasury says it will not be able to pay all its bills, which many predict will send the economy into a tail spin.