POLITICS

Bargainers reach deal to head off gov't shutdown

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WASHINGTON (AP) - Congressional negotiators reached agreement Thursday on a compromise spending bill to avert a weekend federal shutdown. They also worked toward a deal renewing the payroll tax cut and unemployment benefits for another year but prepared a shorter version as a fallback in case talks fell short.

Senate Majority Leader Harry Reid.

Senate Majority Leader Harry Reid, D-Nev., told reporters that he was still optimistic that bipartisan talks on year-long extensions of the payroll tax cut and unemployment coverage would succeed. But as a "Plan B," he said, they were also working on a two-month extension, which would also prevent cuts in Medicare reimbursements for doctors for that period.

"We're still working on the long-term" bill, Reid told reporters as he exited the Capitol after a day of talks over both the payroll tax and spending measures. As for the two-month version, he said, "We'll only do that if what we're working on doesn't work out."

Reid's remarks put a slight damper on a day on which for the first time, Democratic and Republican leaders expressed optimism at prospects for swift compromise on their payroll tax standoff and a spending battle that had threatened to shutter federal agencies beginning Saturday.

A deal on a $1 trillion spending bill was reached after Republicans agreed to drop language that would have blocked President Barack Obama's liberalized rules on people who visit and send money to relatives in Cuba.

But a GOP provision will stay in the bill thwarting an Obama administration rule on energy efficiency standards that critics argued would make it hard for people to purchase inexpensive incandescent light bulbs.

The House is expected to approve the spending measure Friday, and the Senate could follow suit, possibly the same day.

Bargainers were considering the two-month version of the payroll tax cut and unemployment benefits bill because so far, they haven't reached agreement on how a year-long extension would be paid for, said a Democratic aide who spoke on condition of anonymity to discuss the private talks.

The two-month bill would cost $40 billion, according to the aide, and would let lawmakers revisit the measure after returning to Washington after the holiday season.

Donald Stewart, spokesman for Senate Minority Leader Mitch McConnell, R-Ky., said talks aimed at agreeing to a year-long bill will continue.

"We're 12 hours into this debate, they just started talking," he said. "I wouldn't hit the panic button."

Still another year-end bill, setting new rules for the handling of terror suspects in U.S. custody, won final congressional approval and headed to President Barack Obama's desk for his signature.

"Right now, Congress needs to make sure that 160 million working Americans don't see their taxes go up on Jan. 1," said Obama, referring to the tax cut extension at the core of the jobs program he outlined in a nationally televised speech three months ago.

House Speaker John Boehner of Ohio, the most powerful Republican in an era of divided government, agreed. "We can extend payroll tax relief for American workers, help create new jobs and keep the government running. And frankly, we can do it in a bipartisan way," he said.

The long-moribund job market, too, appeared to be on the mend.

Government figures showed 366,000 applications for unemployment benefits were filed last week, the lowest number since the near-collapse of the financial system in 2008 and the brutal recession that followed.
In the Capitol, the previous day's bristling rhetoric and partisan jabs all but vanished.

Republicans agreed to consider changes to a $1 trillion spending bill compromise that they and at least one Democrat said had been wrapped up days ago. The White House said it wanted adjustments.

There were separate negotiations on legislation to extend the Social Security payroll tax cut and unemployment benefits. Democrats abandoned their demand for a surtax on million-dollar incomes that they wanted to include in the measure, removing a provision that Republicans strongly opposed.

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