Treasury Secretary Steven Mnuchin said Thursday that budget and debt negotiators have reached an agreement on the core elements of a deal to increase the government’s borrowing cap and set a $1.3 trillion overall level for the agency budgets that Congress passes each year.

Speaking on CNBC’s “Squawk Box” on Thursday, Mnuchin said negotiations with Democratic House Speaker Nancy Pelosi of California have settled on a debt limit increase that would cover two years. He said they’ve agreed on spending levels, too, though he did not disclose them.

Still to be resolved are offsetting spending cuts to help finance the deal and other “structural issues,” Mnuchin said. The Trump administration is pressing for up to $150 billion in such cuts, well above a figure that would be easy to quickly negotiate.

“The good news is we’ve reached an agreement between the administration, the House and the Senate on top line numbers for both year one and year two,” Mnuchin said, speaking from France, where he is attending an economic summit. “We’re now discussing offsets as well as certain structural issues, and we’ve agreed as a part of that deal there would be a long-term two-year debt ceiling increase.”

At issue are two separate but pressing items on Washington’s must-do agenda: increasing the so-called debt limit to avert a first ever default on U.S. payments and acting to set overall spending limits and prevent crunching automatic spending cuts from hitting the Pentagon and domestic agencies in January.

Pelosi and Mnuchin spoke by phone again Thursday, Pelosi told reporters.

“Our conversations are continuing. We’ve been very firm though about a decision. If they want us to have this done by before we leave we have to come to a conclusion pretty soon,” Pelosi said.

Reaching an agreement also eliminates the possibility of a repeat government shutdown when the current fiscal year ends Sept. 30. President Donald Trump ended up on the losing end of a record 35-day partial shutdown last December and January.

“Nobody wants a shutdown in any scenario,” Mnuchin told the network.

Mnuchin is taking the lead for the Trump administration in negotiations. Conservative forces in the White House and House Republicans don’t like the way the deal is shaping up.

Democrats and Senate Republicans form the core of a powerful coalition favoring a deal. But House conservatives that comprise the core of Trump’s base in Congress are wary of the emerging agreement and warn that Trump may reject a deal that doesn’t have their support. The alternative is to run the government on auto-pilot, a prospect that alarms the Pentagon and its allies.

The talks have been going for weeks but took on new urgency as deficit estimates worsened, creating an unacceptable risk of default in early to mid-September. Mnuchin clarified that the risk of a debt default in September is relatively low, limited to Treasury’s “most conservative scenario.”

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