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.” 
 
 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 But he did not address whether a compromise is emerging or whether he has withdrawn objections to the pending spending measure.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. 
 
 Senate Democratic leaders met with Obama on Wednesday at the White House to weigh whether to drop their demand that the $120 billion payroll tax cut be paid for with a new surtax on millionaires. Republicans have rejected the idea, but it was not clear Wednesday whether a concession from Democrats would be enough to produce a deal. 
 
 Many Republicans express deep skepticism that extending the payroll tax cut would spark economic growth, as the president and Democrats have argued. 
 
 On Wednesday, Senate Republicans also blocked Democratic efforts to vote on a payroll tax bill approved Tuesday by the GOP-led House. The bill would link the tax extension to a series of Republican initiatives that include speeding up the construction of an oil pipeline from Canada to the Gulf Coast. Obama opposes tying the spending measure to the Keystone XL pipeline. 
 
 Reid said he wanted the vote to prove that the House measure lacks support — a first step, he said, to forcing negotiations on a compromise. Under Senate rules, Democrats can demand a vote on the bill Saturday but need members’ unanimous consent to vote before then. 
 
 “The sooner we put this useless partisan charade behind us, the sooner we can negotiate a solution that protects middle-class workers,” Reid said. 
 
 But McConnell insisted that the Senate should first take up the spending measure, which would keep the government funded through September. 
 
 Republicans say bipartisan negotiators have reached a deal on the spending bill. But they say the White House and Reid will not allow a final vote on the measure, holding the bill hostage and threatening a shutdown to increase Democratic leverage on the payroll tax issue. 
 
 Before filing the government funding bill after midnight Thursday, House Republicans huddled for two hours late Wednesday to discuss whether to proceed with a vote, even without a Democratic sign-off. 
 
 That could prove tricky. Many conservatives object to the bill’s $1.043 trillion spending level, negotiated by Democrats and Republicans in the August debt deal, and it’s not clear whether the bill could pass without some Democratic support. 
 
 House Speaker John A. Boehner (R-Ohio) told reporters late Wednesday that no decisions had been made, but that the House had acted to extend the tax cut and now it was the Senate’s turn. 
 
 “I’m tired of hearing what the Senate can’t do,” he said. “I think it’s time for us to wait and see what the Senate can do.” 
 
 When the House passes a spending bill, lawmakers can go on their holiday break, leaving Senate Democrats with the unpleasant choice of accepting the House’s payroll tax bill or rejecting it and taking the blame for allowing the tax break to expire. 
 
 The tension highlighted the fact that neither side has come up with a way to pay for the tax cut that can get the 60 votes necessary for Senate approval. 
 
 Senate Democrats say that the House bill is unacceptable and that they will vote against it, and the White House has said Obama would veto it. 
 
 Their objections center on several GOP initiatives added to the bill to attract votes from conservatives, many of whom would not support the tax cut extension otherwise. They include cuts in unemployment benefits, new rules that could require the unemployed to take drug tests and enroll in GED programs to receive benefits and the delay of new regulations on boiler emissions. 
 
 The bill would also extend a pay freeze for federal workers and raise Medicare premiums for upper-income seniors. And the two sides are clashing over a provision that would force a decision on a construction permit for the Keystone XL within 60 days. The State Department, which is reviewing the pipeline issue, has said that if forced to make a decision so quickly, it would have to deny the permit. 
 
 Twice, the Senate has also blocked Democratic proposals for the millionaire surtax. 
 
 If government shuts down, some agencies and departments would continue working, thanks to a partial spending bill passed in November. The departments of Agriculture, Commerce, Housing and Urban Development, Justice, State and Transportation, as well as NASA and some other smaller agencies, would be spared. 
 
 But much of the government would be shuttered. National parks would close, for instance, and processing of some passports would cease. The showdown marks the fourth time this year that congressional disputes have dragged the government to the brink of a partial shutdown. 
 
 Behind the white-hot rhetoric of their leaders, many rank-and-file lawmakers predicted that there would be a last-minute compromise to extend the tax cut and prevent a shutdown. A number of them wearily said that the only casualty of the fight would be Congress’s already battered reputation. 
 
 “It’s all going to get passed eventually,” said Sen. Tom Coburn (R-Okla.). “But the political maneuvering is sickening.” 
 
 Staff writers Paul Kane, Ed O’Keefe, David Nakamura and Felicia Sonmez contributed to this report. ||||| Senate Minority Leader Sen. Mitch McConnell (R-KY) is surrounded by members of the press as he leaves his office for the day December 16, 2011 on Capitol Hill. (Alex Wong/GETTY IMAGES) 
 
 House Speaker John Boehner (R-Ohio) said Sunday that he and other House Republicans are opposed to the two-month payroll tax cut deal that overwhelmingly passed the Senate on Saturday, casting uncertainty on the future of a measure that leaders of both parties have said must pass before the end of the year. 
 
 In an appearance on NBC’s “Meet the Press,” Boehner said the short-term package, which was negotiated by Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.), should be re-worked by a conference committee in order to reach a longer deal that is acceptable to House Republicans. 
 
 “Well, it’s pretty clear that I and our members oppose the Senate bill,” Boehner said. “It’s only for two months. You know, the president said we shouldn’t go on vacation until we get our work done. And frankly, House Republicans agree.” 
 
 Boehner’s comments came a day after the Senate agreed to a two-month extension in a payroll tax cut and unemployment benefits that will expire Jan. 1, top priorities for President Obama and congressional Democrats. 
 
 The White House and congressional Democrats responded that if the House does not proceed on the compromise that overwhelmingly passed the Senate, Republicans will be to blame. 
 
 “If House Republicans refuse to pass this bipartisan bill to extend the payroll tax cut, there will be a significant tax increase on 160 million hardworking Americans in 13 days that would damage the economy and job growth,” White House Communications Director Dan Pfeiffer said in a statement. “After months of opposition, we are glad that Republicans were finally showing a willingness to not raise taxes on middle class families.” 
 
 Pfeiffer added that the White House believes Congress must continue working toward a one-year deal but that lawmakers “should pass the two month extension now to avoid a devastating tax hike from hitting the middle class in just 13 days.” 
 
 Reid noted in a statement that Boehner last week requested that he and McConnell work together on a compromise. 
 
 “I would hate to think that Speaker Boehner is refusing to act on this bipartisan compromise because he is afraid it will actually pass, but I cannot imagine any other reason why he would not bring it up for a vote. . . .Neither side got everything they wanted, but we forged a middle ground that passed the Senate by an overwhelming bipartisan majority,” Reid said. 
 
 Boehner called the House-passed measure a “reasonable, responsible bill” and contended that the two-month deal would bring uncertainty to the economy. 
 
 “If you talk to employers, they talk about the uncertainty,” he said. “How can you do tax policy for two months? So, we really do believe it’s time for the Senate to work with the House, to complete our business for the year. We’ve got two weeks to get this done. Let’s do it the right way.” 
 
 Asked whether House Republicans might attempt to totally rework the bill when they return to Washington on Monday, Boehner said the measure should be negotiated by a bipartisan, bicameral conference committee just as the nearly $1 trillion government funding measure that passed both chambers late last week was. 
 
 “Under the Constitution, when we have these disagreements, there could be a formal conference between the House and Senate to resolve our differences,” Boehner said. “But our members really do believe, we have to do our work. . . . And earlier this week, both the House and Senate, in a bipartisan, bicameral way, funded our government through Sept. 30. We did it in a regular process, regular order, and what the regular order here is a formal conference between the House and Senate.” 
 
 Complicating matters is the fact that the Senate on Saturday adjourned for the year – and even though the chamber will be holding brief “pro forma” sessions every few days for the next two weeks, most lawmakers have departed Washington. 
 
 Boehner declined to say whether there might be a resolution to the payroll tax debate before Christmas. 
 
 “I don’t know,” he said. “All I know is that it’s time to do this the right way. . . .It’s time to do the right thing for the American people. No kicking the can down the road.” 
 
 Extending the items for only a brief time came at a heavy price for Democrats — a requirement that Obama quickly decide whether to issue a construction permit for the controversial 1,700-mile Keystone XL pipeline. 
 
 That means Congress could be back to the same arguments in February — whether to let taxes rise and unemployment benefits lapse — just as Obama prepares to issue a ruling on the pipeline, which union leaders back but environmentalists oppose. 
 
 “As much fun as we had this time, it’ll be a lot more fun next time,” Sen. Ben Nelson (D-Neb.) said. 
 
 
 
 In a conference call Saturday, House Republicans voiced vigorous opposition, said a member who took part. . 
 
 “House Republicans are furious. . . . It was a chorus of frustration with the Senate. They’re always in punt formation,” said Rep. Jason Chaffetz (R-Utah), a college football kicker. “If we want jobs and if we want the economy to grow, we need some stability and predictability. This will make the situation worse, not better.” 
 
 He said rank-and-file House Republicans appeared eager to change the Senate package. 
 
 Leading House Democrats indicated that they will urge their members to back the deal. 
 
 If the House approves the deal, the White House has indicated that Obama will probably deny the pipeline permit, on guidance from the State Department that the 60-day window in the bill to make a decision is not long enough to complete necessary reviews of the routing through an environmentally sensitive area of Nebraska. 
 
 But Republicans would surely use that decision to accuse Obama of blocking a project they say will create jobs. And they could try to trade a further extension of the tax cut in February for a decision to allow the project to move ahead or for another GOP initiative. 
 
 “It seems like an issue that, once people understand it, it’d be difficult for the administration to deny without Congress acting again,” Sen. Rob Portman (R-Ohio) said of the pipeline, which would carry Canadian oil to the Gulf Coast. “So, I think it comes back up.” 
 
 Democrats are likewise itching for another round of debate on the payroll tax holiday, which polls show is broadly popular. 
 
 On Saturday, Obama signaled he will take up that argument quickly after House passage, saying it would be “inexcusable” for Congress not to keep the tax holiday in place for all of 2012. 
 
 “It should be a formality, and, hopefully, it’s done with as little drama as possible when they get back in January,” he said. 
 
 Democrats would use the fight to echo their central election-year theme — that Republicans protect the wealthy at the expense of the middle class. In the next round, they would renew demands that the middle-class tax holiday be funded with a surtax on those who make more than $1 million a year. 
 
 “It’s a fight we welcome,” Sen. Charles E. Schumer (D-N.Y.) said. 
 
 GOP leaders have supported extending the payroll tax holiday. But many rank-and-file Republicans have had to be coaxed into it, fretting about the impact on Social Security and disputing Obama’s contention that letting workers keep more of their paychecks for a few months would spur the economy. The federal retirement program is funded through payroll taxes paid by workers and their employers. 
 
 The unusual Saturday vote in the Senate capped a wild week on Capitol Hill. Democrats seeking a deal on the tax-cut issue held up a separate agreement that had been reached on a $1 trillion government funding measure. 
 
 With a short-term funding measure expiring at midnight Friday, the stalemate left many federal agencies facing the possibility of a shutdown, the fourth such threat this year. After the spending bill was tweaked late in the week to satisfy White House concerns, the drama over the measure was also settled Saturday, with the Senate adopting a bill that details spending for three-fourths of government agencies through Sept. 30. 
 
 But the week’s standoff made for an odd reversal of Washington’s ideological clashes: Many Republicans agreed to a tax cut with reluctance, and Democrats briefly stood in the way of appropriating funds needed to provide basic government services. 
 
 On the payroll tax package, the Senate arrived at a two-month deal after talks fell apart over how to pay to keep the tax rate at 4.2 percent instead of its standard 6.2 percent for a full year. 
 
 The $33 billion two-month package includes the $20 billion tax cut, an $8.4 billion extension in jobless benefits and a brief postponement of a scheduled cut in Medicare reimbursement rates paid to doctors, at a cost of $4 billion. 
 
 In the end, the Senate agreed to pay for the measure by raising fees charged to homeowners who buy a new house with a loan guaranteed by Fannie Mae or Freddie Mac. 
 
 A homeowner buying or refinancing a house that costs $220,000 will, on average, pay less than $15 in additional charges a month, a change that will raise $36 billion over 10 years, congressional aides said. 
 
 The higher fees have been embraced by both parties as a way to allow private insurers to better compete with Fannie Mae and Freddie Mac, which insure nine out of every 10 home loans made in the United States and are widely thought to undervalue loan risk. 
 
 The two-month deal represents only the most recent in what has amounted to a Russian doll’s worth of postponements of tough choices by Congress. 
 
 This deal was necessary because the deficit-reduction supercommittee failed last month to come to an agreement that would roll a solution to the payroll tax issue into a broad deficit-reduction strategy, as leaders had hoped. 
 
 The supercommittee was created because Congress failed to arrive at a grand bargain to greatly cut the debt and reform taxes and entitlements as part of the August deal to raise the nation’s legal borrowing limit. In that deal, Congress asked the 12-member panel to give it a try. 
 
 But the two-month deal would let a battered, divided Congress do the one thing that could improve its public reputation: Take a break from its nasty fights and leave Washington for the holidays. 
 
 Staff writer David Nakamura contributed to this report. ||||| The endgame at hand, both Democratic and Republican congressional leaders expressed optimism Thursday at prospects for swift compromise to extend Social Security tax cuts, keep long-term jobless benefits flowing and avoid a threatened partial government shutdown at midnight Friday. 
 
 President Barack Obama speaks in the Eisenhower Executive Office Building on the campus in Washington, Thursday, Dec. 15, 2011, where he announced action to provide minimum wage and overtime protections... (Associated Press) 
 
 Still another year-end bill, setting new rules for the handling of terror suspects in U.S. custody, won final congressional approval and headed to President Barack Obama's desk for his signature. 
 
 "Right now, Congress needs to make sure that 160 million working Americans don't see their taxes go up on Jan. 1," said Obama, referring to the tax cut extension at the core of the jobs program he outlined in a nationally televised speech three months ago. 
 
 House Speaker John Boehner of Ohio, the most powerful Republican in an era of divided government, agreed. "We can extend payroll tax relief for American workers, help create new jobs and keep the government running. And frankly, we can do it in a bipartisan way," he said. 
 
 The long-moribund job market, too, appeared to be on the mend. Government figures showed 366,000 applications for unemployment benefits were filed last week, the lowest number since the near-collapse of the financial system in 2008 and the brutal recession that followed. 
 
 In the Capitol, the previous day's bristling rhetoric and partisan jabs all but vanished.0 
 
 Republicans agreed to consider changes to a $1 trillion spending bill compromise that they and at least one Democrat said had been wrapped up days ago. The White House said it wanted adjustments. 
 
 There were separate negotiations on legislation to extend the Social Security payroll tax cut and unemployment benefits. Democrats abandoned their demand for a surtax on million-dollar incomes that they wanted to include in the measure, removing a provision that Republicans strongly opposed. 
 
 "We hope that we can come up with something that would get us out of here at a reasonable time in the next few days," said Senate Majority Leader Harry Reid of Nevada. 
 
 At a news conference, Boehner minimized the concession, noting that Democrats lacked the votes to impose the surtax a year ago when they commanded 60 votes in the Senate. Even so, he said, "there was some movement yesterday from the White House and Democrat leaders" toward a compromise. 
 
 Boehner also left open the possibility of a compromise on another key sticking point _ a House-passed provision that all but requires construction of the proposed Keystone XL oil pipeline from Canada to Texas. 
 
 Construction "will put 20,000 people to work immediately And there are about 115,000 other jobs directly related to it," he said. Yet he skipped an opportunity to say construction of the project was a non-negotiable condition as talks on the payroll tax cut bill proceed. 
 
 Obama has threatened to veto the House-passed bill, in part citing the requirement for the pipeline. The project has been studied for more than three years, but the president recently announced he would put off a decision until after the 2012 elections. 
 
 Without an extension of the payroll tax cut, 160 million Americans will have smaller take home pay beginning on Jan. 1, a fact that the president and leaders of both parties stressed as they looked for compromise. 
 
 Obama asked Congress to extend and also to expand the payroll tax cut that took effect last Jan. 1 and is due to expire at the end of the year. The House-passed bill renews the current reduction for one year, and it was unclear whether a final compromise would go any further. 
 
 The president also wants to leave in place a system that provides aid for up to 99 weeks for the long-term unemployed. The House-passed measure reduces the total by 20 weeks, a step that the administration says would cut off 3.3 million individuals and that Democrats are hoping to soften if not reverse. 
 
 Also part of the negotiations was an attempt to head off a threatened 27 percent cut in payments to doctors who treat Medicare patients, an item added in the House to appeal to conservatives unhappy at extending the payroll tax cuts. 
 
 Reid indicated that a number of expiring tax breaks were on the table, as well, a list that included a provision that benefits commuters who use mass transit. 
 
 In a bow to deficit-conscious conservatives in the House, Obama and leaders in both parties have agreed to offset the cost of the measure to avoid raising deficits. 
 
 The White House and Democrats wanted to use the surtax on million-dollar income to finance most of the bill. But with that off the table, they were required to look elsewhere in talks with Republicans. 
 
 The House-passed measure relied on a pay freeze and increased pension contributions for federal workers, as well as higher Medicare premiums for seniors with incomes over $80,000, beginning in 2017. The bill would also would raise a fee that is charged to banks whose mortgages are guaranteed by Fannie Mae and Freddie Mac, and cancel more than $40 billion from the year-old health care bill that is Obama's signature domestic achievement. 
 
 At about $1 trillion, the year-end spending measure would lock in cuts that Republicans extracted from Democrats in negotiations conducted months ago against the deadline of a previous government shutdown threat. 
 
 This time, the two sides reached an agreement days ago, according to Republicans and at least one Democrat, well ahead of the Friday midnight deadline. Somewhat belatedly, the White House and Reid insisted otherwise, and Republicans accused them of reneging on the deal to gain leverage in negotiations on the payroll tax bill. 
 
 In response to the Democrats, House Republicans threatened on Wednesday to repackage the measure and pass it. The leadership held the threat in abeyance while compromise negotiations took place. 
 
 The separate defense bill covered military personnel, weapons systems, the wars in Afghanistan and Iraq and more at a cost of $662 billion, $27 billion below Obama's request. The Senate approved it by a resounding 86-13. 
 
 The main controversy revolved around a provision to require military custody for foreign terrorist suspects linked to al-Qaida or its affiliates and involved in plotting or attacking the United States. Under a change made to gain Obama's backing, the legislation would permit the FBI to arrest and interrogate foreign terror suspects, as is now the case. 
 
 ___ 
 
 Associated Press writers Donna Cassata and Andrew Taylor contributed to this story. ||||| Mitch McConnell says Harry Reid should talk to John Boehner. Reid says he wants to talk to Boehner to hash out a compromise on extending the payroll tax holiday and jobless benefits. But Boehner first wants Reid to show his hand by actually passing something. 
 
 The three top leaders in Congress met privately Wednesday evening, but they came away no closer to a deal. At the meeting, Boehner said he wouldn’t negotiate with Reid and that the Senate majority leader would have to work out a payroll tax plan with McConnell, according to two sources familiar with the meeting. 
 
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 Boehner’s position is “he can’t cut a deal with Reid. If he did, our guys would go nuts,” according to a Republican source. The source added that without a Senate product, House Republicans are negotiating among themselves, and rank-and-file Republican lawmakers are “keenly focused” on making sure that doesn’t happen. 
 
 Whether Reid and McConnell can cut a bipartisan deal — that can also pass the Republican-led House within days — will be the key question facing the leaders Thursday as they struggle to pass a payroll tax holiday, extend jobless benefits and approve more than $1 trillion in federal spending before adjourning for the holidays. Rank-and-file lawmakers in both parties are getting agitated over the inability of Congress to complete its most basic tasks without lurching into another crisis. 
 
 The latest effort to find a breakthrough came as Democrats were considering scrapping their millionaires’ surtax. But it was far from clear what else they’d give up and whether Republicans would return any concessions. 
 
 For every step toward a possible deal, there seemed to be a step backward: The White House put out a strongly worded statement Wednesday night calling on Congress to put off a mammoth $1 trillion government funding bill that Republicans had demanded as a condition for passing the payroll tax cut. 
 
 Instead, the White House wants a short-term spending bill, an idea many Republicans have scoffed at. 
 
 With a Friday deadline rapidly approaching, the developments created yet another picture of a dysfunctional Washington and a Congress with rock-bottom approval ratings that’s been defined by 11th-hour brinkmanship. Congress has until Jan. 1 to extend the payroll tax holiday before taxes go up for millions of workers, but lawmakers are trying to finish the year’s work by Friday’s scheduled adjournment. 
 
 There are still a host of contentious battles ahead that will need to be ironed out between the White House and congressional leaders — and blessed by the rank-and-file. At the forefront in the payroll tax fight are several controversial matters, including the construction of a new oil pipeline, cuts to health care programs, the scrapping of an environmental rule and shortening the duration of jobless benefits. 
 
 “The two biggest things are frustration with Washington’s gridlock and grave anxiety about some of the really bad ideas that are being foisted in Washington right now,” said Sen. Sheldon Whitehouse (D-R.I.). “Those things really unnerve people at home.” 
 
 By Wednesday afternoon, each side had retreated to its respective corner: Reid and Senate Democratic leaders were meeting at the White House with President Barack Obama and weighing what concessions to make, including ditching the millionaires’ surtax that Republicans strongly oppose.
– The gist of the articles coming out of Washington this evening suggests that lawmakers will manage to strike a spending deal before tomorrow's midnight deadline to avoid a shutdown. Also looking up are prospects for deals to extend the payroll tax cuts and jobless benefits, say the Washington Post, AP, Politico, and the Hill. Much of the optimism stems from the fact that lawmakers are managing not to snarl at each other in public, unlike yesterday. Some examples: Harry Reid: "We've done enough back and forth. ... We hope that we can come up with something that would get us out of here at a reasonable time in the next few days." John Boehner: "We can extend payroll tax relief for American workers, help create new jobs and keep the government running. And frankly, we can do it in a bipartisan way." Mitch McConnell: Pronounced himself "confident and optimistic." House Appropriations Committee Chair Hal Rogers, R-Ky: "Things are looking up and I am looking up."