Endgame Negotiations Intensify as Defense, Tax Deals Near

With so much left for Congress to do before adjourning for the year, Senate Majority Leader Harry Reid warned senators Monday that they should prepare to stay in Washington for an extra week, while House Republicans prepared to poll their members on whether they should respond to President Obama's immigration order before heading home.

Senators have been operating under the assumption that they would break for the rest of the year in the next two weeks, by Dec. 12. But Reid warned in a floor speech Monday: "We may have to be here a third week, and everyone should understand that. ... We may have to be here the week before Christmas and hopefully ... not into the Christmas holiday, but there are things we have to get done."

The implied threat: Put your heads down and get this done, or we'll all be here through the holidays.

Members still have to pass a spending bill in order to avoid a government shutdown, slated to begin on Dec. 11 if Congress does not act. Also on Reid's list of priorities before the end of the year—and Democrats' majority—are a reauthorization of the National Defense Authorization Act, a number of the administration's nominees, including seven to the Department of Energy, and a package to extend a number of tax breaks that expired at the end of last year.

Both the NDAA and the tax-extenders package appeared close to settled on Monday.

Senate Armed Services Chairman Carl Levin said he and House Armed Services Chairman Buck McKeon would be presenting an NDAA reauthorization bill Tuesday morning or sooner. Levin indicated they had compromised on a dispute over military benefit cuts, though he would not hint at the solution they reached. "We still have to present it to our bodies," Levin said. "That's not a minor issue."

Levin huddled with fellow Democrats on the Armed Services Committee after votes on Monday evening, just off the Senate floor. There, he presented the package which he said includes additional funding for the administration's fight against ISIS. In order to pass the bill, Levin said, the NDAA will be presented in both chambers without any amendments for fear that any stray additions could kill the overall package. "It's not a way to legislate, but it's where we're at," he said.

The NDAA will not include a provision pushed by Sen. Kirsten Gillibrand of New York, who has fought in recent days for Congress to reconsider her amendment to prevent military sexual assaults and pull the adjudication thereof out of the chain of command. Levin called the inability to include amendments like Gillibrand's "unfortunate," but noted that several sexual-assault provisions will be included in the final bill.

Gillibrand huddled with Sens. Richard Blumenthal of Connecticut and Mazie Hirono of Hawaii, both of whom support the measure, after the meeting. The New Yorker plans to host a press conference on the issue Tuesday, and Blumenthal said that they would continue to push for consideration.

Congress has passed an NDAA every year for the last 53 years, and with Levin and McKeon retiring this year, members are reluctant to break that streak. House leadership aides said they are awaiting McKeon's text, but that there is a chance it could be taken up as a suspension vote as early as Thursday.

At the same time, House Republicans geared up to move a one-year extension of dozens of popular business and individual tax breaks that expired at the end of 2013. The package will be attached to the Achieving Better Life Experience Act, a bill allowing the parents of disabled children to open tax-free savings accounts, which has broad bipartisan support in both chambers.

House Republicans were preparing Monday night to post this one-year version of the extender bill online for public viewing. The House's version would simply extend the wide array of more than 50 breaks that have not yet been renewed just until the end of December 2014—a move to allow businesses and individuals to claim them on their 2014 tax returns.

Movement in the House comes after a veto threat last week from the White House against a broader, longer-term deal between Republicans, Reid, and some other Democrats, on the contention it was too tilted toward well-connected corporations. The majority leader has since taken a backseat in those negotiations, allowing Senate Finance Committee Chairman Ron Wyden to work with House Financial Services Chairman Dave Camp to devise a new deal before year's end. Wyden's office did not respond to requests for comment Monday, and it was unclear whether he played a role in the House's decision to move forward on a one-year extension.

But it appears that the House legislation will have little trouble passing the Democratic-controlled Senate. "We wouldn't declare that dead on arrival. ... That's always been the counterargument of those who didn't want a deal," a Senate Democratic leadership aide said. "But we wouldn't be reflexively opposed to that."

Wyden said that he's been talking to colleagues in both political parties but declined to take a position Monday night on a one-year tax extender. He told reporters repeatedly that he wouldn't negotiate in public on the bill and that "we've got quite a ways to go. This game is not over." If the House sends over a one-year bill, Wyden said, "we'll deal with that when we see it."

The House Republican Conference, meanwhile, will meet Tuesday morning, and the meeting's chief concern will be how to fund the government. House appropriators have been working for weeks on an omnibus bill that would fund all government agencies for one year, and have unequivocally stated their preference for going that route and relying on a bipartisan vote to pass the bill.

Many in the GOP Conference, however, want to act to stymie President Obama's immigration executive order. An option still under discussion at the leadership table is to fund every government agency for a year, with the exception of the Department of Homeland Security, which would receive only a short-term funding extension. DHS is tasked with giving work visas to the millions of undocumented immigrants eligible under Obama's order.

House Minority Leader Nancy Pelosi has vowed to withhold Democratic votes from any such bill, and it remains unclear whether Republicans could pass it alone, over the objection of some in the conference who want Speaker John Boehner to act more aggressively to combat the immigration order.

In order to appease those voices, leadership will push a separate bill, authored by Rep. Ted Yoho of Florida, that would state that the president does not have unilateral authority to exempt immigrants from deportation if they are in the country illegally. Whether the bill, along with a full or partial appropriations extension, will mollify the voices in the conference calling for tougher action remains to be seen. Rep. Lamar Smith of Texas and a group of border hawks, the Congressional Border Security Caucus, will meet Tuesday morning ahead of the full GOP Conference meeting to consider a strategy of their own.

In the meantime, the Senate still has a lengthy list of nominees to push through before Democrats lose control of the upper chamber. With the majority of the noncontroversial nominees already confirmed, Reid has begun bringing up nominations with less—in some cases much less—Republican support starting this week. With the nuclear option in place, none of the nominations are likely to fail. But Republicans can refuse to make any deals with Democrats on reducing cloture time, potentially keeping their colleagues in the majority in Washington for a few more days while they head home for the holidays.

Alex Brown and Rachel Roubein contributed to this article.