Congress strikes deal to avert government shutdown

US congressional leaders struck Thursday a $1 trillion funding deal to avert a pre-Christmas government shutdown, as talks between Democrats and Republicans for once defused a bitter confrontation. Negotiators were also considering an extension of a payroll tax cut demanded by President Barack Obama to put an extra $1,500 in the pockets of working Americans next year and stimulate the sluggish economy.
Leaders from the Republican-controlled House of Representatives and the Democratic-run Senate agreed to allow a vote by Friday on a bill that would fund the US government through fiscal year 2012, congressional sources said. If the bill does not pass Friday, the vast machinery of the US government would grind to a halt, as federally-funded Christmas events, public buildings and government agencies ran out of money.
"I am hopeful that the House and Senate can pass this bill tomorrow to prevent a government shutdown, fund critical programs and services for the American people and cut spending to help put the nation's finances on a more sustainable path," House Appropriations Committee Chairman Hal Rogers said. Talks took place throughout the day as lawmakers sought to break the impasse driven by pre-positioning for Democratic President Barack Obama's 2012 reelection bid and deep antipathy between the parties.
The root of the stalemate lay in brinkmanship by both parties over a push by Obama for a tax cut for 160 million workers and a Republican bid to force him to reconsider delaying a decision on a Canada-US pipeline plan. Republicans had accused Obama of ordering Democrats to stall the funding bill until the payroll tax issue was agreed.
Senate Democratic Majority Leader Harry Reid said he was weighing a two-month extension of the payroll tax cut and unemployment benefits that would leave current rates unchanged. Obama had called for a one-year extension. "I always have a plan B," Reid said, though adding he hoped to still deliver a year-long extension of the payroll tax and unemployment insurance. A senior White House official signaled that Obama was open to a stop-gap solution if necessary. "Our priority is ensuring that Congress not leave before they ensure that taxes don't go up on 160 million middle class families on January 1," the official said.