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U.S. Congress aims for fast budget, debt limit passage

(Adds Biden quote, link to graphic on debt)

By David Lawder and Susan Cornwell

WASHINGTON, Oct 27 (Reuters) - A U.S. budget and debt ceiling deal headed toward quick action in Congress on Tuesday as lawmakers rushed to avert yet another fiscal standoff, which threatened to push the federal government into an unprecedented default early next month.

House Speaker John Boehner told fellow Republicans he was clearing the way for a vote on Wednesday on the double-barreled measure, which would bust strict spending caps by $80 billion over the next two years in order to pump up defense and domestic programs.

It also would extend the Treasury Department's borrowing authority until March 2017.

While Senate action is not yet nailed down and lawmakers will flirt with a Nov. 3 deadline for raising the government's debt limit, Congress appeared to be on a smoother track than in past years when faced with fiscal deadlines.

In 2011, credit ratings agency Standard & Poor's downgraded the U.S. government's debt rating, shaking global financial markets, as Republicans held out for tougher demands than Democrats were willing to accept.

A year later, a "fiscal cliff" involving expiring tax cuts and looming deep spending cuts similarly had world economies on edge, with a deal being negotiated as the clock struck midnight on New Year's Eve.

Boehner - taking a victory lap on Tuesday on the budget and debt limit deal he worked out with fellow congressional leaders and the White House - told reporters: "It's going to pass with a bipartisan majority, and I'll be really happy."

The Ohio lawmaker is set to retire from Congress on Friday, having been ousted by Republican conservative rebels who want more aggressive challenges to Democratic President Barack Obama's economic and social policies. Representative Paul Ryan appears to be on track to replace Boehner when the House elects a new speaker on Thursday.

Ryan told reporters he was reserving judgment on the agreement until he reviewed its details.

In a nod to rebellious fellow Republicans clamoring for changes in the way the Republican-controlled House is run, Ryan added, "I think this process stinks," hinting that "under new management" work will get done well before deadlines.

Vice President Joe Biden said the deal "will prevent us from lurching from crisis to crisis," and other administration officials said it would protect Social Security and Medicare recipients from cuts.

White House Council of Economic Advisers Chairman Jason Furman said the added government spending could help create 340,000 jobs in 2016.

Even if the agreement is enacted, Ryan will face an early test as Congress must approve specific new spending for federal programs by Dec. 11 or risk shutting down much of the government. The two-year budget deal provides top-line spending numbers; appropriators will have to hash out specifics.

Representative Thomas Massie, a hard-line conservative, acknowledged that he and other opponents of the higher spending will not be able to stop the broad budget and debt limit deal. "We're going to lose," he told reporters.

To help pay for the additional spending, 58 million barrels of oil from U.S. emergency reserves held at the Strategic Petroleum Reserve would be sold over six years, starting in fiscal 2018.

Central to the pact is the easing of across-the-board budget caps, which would allow the additional $80 billion in spending over two years, split evenly between military and domestic programs. About $50 billion in added spending would come in fiscal 2016, which started on Oct. 1, and $30 billion would be added to the fiscal 2017 budget.

(Additional reporting by Roberta Rampton, Doina Chiacu and Jeff Mason; Writing by Richard Cowan; Editing by Kevin Drawbaugh, Mohammad Zargham and Jonathan Oatis)