Federal Spending Deal Reached, Averting Shutdown

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Congressional negotiators signed off Thursday evening on a $1 trillion spending agreement for federal agencies, just 28 hours before a deadline that would have led to a government shutdown.

After dropping policy prescriptions restricting travel to Cuba and a minor provision related to oversight of financial trades, members of the House and Senate appropriations committees gave final approval to the plan after a four-day standoff that was linked to a separate issue: President Obama’s demands to extend the payroll tax holiday for 160 million workers.
That negotiation, lawmakers and aides said, also could be headed toward an agreement, with lawmakers thinking about extending the tax break for two months to buy more time to determine how to fund it without increasing the federal deficit.
There was a broad shift in tone Thursday on Capitol Hill as leaders on both sides stopped saying the other would be to blame for a potential shutdown and began sending signs of progress.
Talks on the payroll tax began after Democrats dropped their demand that the cut be paid for with a new surtax on those who earn more than $1 million a year.
“Yeah, that’s gone,” Senate Finance Committee Chairman Max Baucus (D-Mont.) confirmed Thursday evening.
But it was not clear whether Republicans would drop a series of provisions added in the House intended to lure votes from conservatives who believe the tax holiday is bad economic policy.
The House “riders” included an effort to speed approval of the construction of the controversial Keystone XL oil pipeline, reforms to unemployment insurance, higher Medicare premiums for upper-income seniors and a year-long extension of a two-year pay freeze for federal workers.
The package also would extend unemployment benefits for the long-term jobless and avert a scheduled cut in Medicare reimbursement rates for doctors.
Baucus, who is negotiating the tax and unemployment package for Democrats, said one consideration was to link the eligibility period of unemployment benefits to the level of joblessness in each state. That would mean that laid-off workers in Nevada — which has a 13.4 percent unemployment rate, the nation’s highest — would be eligible to receive benefits for a longer period than those in North Dakota, the state with the lowest unemployment rate.
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SOURCE: The Washington Post
Rosalind S. Helderman and Paul Kane