Congress reaches deal to thwart government shutdown

Congressional negotiators signed off Thursday evening on a $1 trillion spending agreement for 2012 for federal agencies, barely 27 hours before a deadline that could have led to a government shutdown. After dropping minor policy prescriptions that President Barack Obama opposed, members of the House and Senate Appropriations Committees gave final approval to the plan after a four-day standoff related to Obama’s demands to extend the payroll tax holiday for 160 million workers. That negotiation, lawmakers and aides say, also could be headed toward an agreement, with lawmakers considering extending the $120 billion tax break for two months to buy more time to determine how they would offset the benefit’s cost so it did not add to the federal deficit. The White House initially had pushed Congress to delay the spending plan until the issue of the payroll tax was resolved, a move that raised the specter of a government shutdown and threatened to increase workers’ withholding tax at the start of the new year. Linking the two measures only complicated the negotiations, however, and Republicans did not give in to Obama’s demands on how to set up the payroll tax provision. With the holiday season upon them, some aides suggested that lawmakers’ exhaustion and eagerness to leave the embattled Capitol for several weeks served as key factors in reaching the deals. Next year’s session will begin in late January. Read the entire Washington Post article here.