Senate leaders say deal on spending, tax cut measures may come soon

Showing a new conciliatory tone, Senate leaders opened congressional business Thursday by suggesting that a bipartisan compromise might come soon on a spending measure to keep the government running past Friday and a bill to extend a one-year cut in the payroll tax rate paid by 160 million workers.

Senate Majority Leader Harry M. Reid (D-Nev.), who has been holding up a $1 trillion spending measure that would fund much of the government through next September, said he believes both issues can be resolved “in the next few days.”

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President Obama says there is no reason for the government to shut down. He said Congress "cannot and should not leave for vacation" until they've made sure that a payroll tax increase doesn't happen. (Dec. 15)

President Obama says there is no reason for the government to shut down. He said Congress "cannot and should not leave for vacation" until they've made sure that a payroll tax increase doesn't happen. (Dec. 15)

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Senate and House leaders are expressing optimism that a bipartisan deal may be near that can avert a government shutdown. House Speaker John Boehner told reporters Thursday there is no need to close the government. (Dec. 15)

Senate and House leaders are expressing optimism that a bipartisan deal may be near that can avert a government shutdown. House Speaker John Boehner told reporters Thursday there is no need to close the government. (Dec. 15)

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Minority Leader Mitch McConnell (R-Ky.) likewise said that he and Reid have been in talks about how to move forward and that he is “confident and optimistic” about an agreement.

The government would face a partial shutdown at midnight Friday unless Congress resolves its latest spending battle.

“We’ve done enough back and forth — the Republican leader and me staking out our positions, and our positions are fairly clear to the American people,” Reid said on the Senate floor. “What we’re going to try to do during the next few hours is work toward resolving some of the outstanding issues.”

Speaking Thursday at the White House, President Obama said Congress must solve the payroll tax issue and get a funding bill in place before adjourning for the holidays.

But he did not address whether a compromise is emerging or whether he has withdrawn objections to the pending spending measure.

“Congress cannot and should not go on vacation before they have made sure that working families aren’t seeing their taxes go up by $1,000 and those who are out there looking for work don’t see their unemployment insurance expire,” he said. “There’s no reason the government should shut down over this, and I expect all of us to do what’s necessary in order to do the people’s business and make sure it’s done before the end of the year.”

Overnight, House leaders advanced a spending bill that had been negotiated by Republicans and Democrats on the House Appropriations Committee. Democratic leaders have kept the measure from moving forward after the White House expressed lingering concerns with some of the bill’s provisions and said it wanted Congress to agree to extend the tax cut first.

By filing the bill, the House indicated it would push ahead with the measure even without Democratic support.

Reid said Thursday that such House action would be a mistake. But he called the remaining Democratic concerns with the spending measure “resolvable” and “small in number” and said Congress is getting closer to a deal.

The Senate leaders’ apparent optimism comes after negotiations over how to extend the tax holiday and avoid a government shutdown ground to a halt Wednesday.

With a Friday deadline fast approaching, the threat of a shutdown grew more urgent. Cabinet secretaries for the first time formally alerted affected federal workers to the possibility of a shutdown — indicating in an ­e-mail that they would determine which staffers are “essential” to maintain operations in the event of a funding block.

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