WASHINGTON — 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.
Senate Majority Leader Harry Reid, D-Nev., told reporters he was still optimistic that bipartisan talks on yearlong extensions of the Social Security payroll tax cut and unemployment coverage would succeed. But as a "Plan B," he said, they were working on a two-month extension as well, which would also prevent cuts in Medicare reimbursements for doctors during 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 at midnight Friday.
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.
The House is expected to approve the spending measuretoday, and the Senate could follow suit, possibly the same day.
Donald Stewart, spokesman for Senate Minority Leader Mitch McConnell, R-Ky., said talks aimed at agreeing to a yearlong extension of the payroll tax measure will continue.
"We're 12 hours into this debate, they just started talking," he said when asked about the two-month version of the bill. "I wouldn't hit the panic button."