Congress now shooting for weekend wrap-up

Congressional leaders made significant progress toward breaking the impasse on year-end measures Thursday and lawmakers are now predicting they will soon wrap up funding for the bulk of government operations.

If their optimism proves founded, they will avert a partial government shutdown for the third time this year.

Congress needs to approve a catch-all spending bill that encompasses the remaining nine annual appropriations bills and a package that extends the payroll-tax holiday and federal unemployment benefits before leaving Washington for the holidays. Some even predicted Congress would pass both by Friday night.

"That's my best guess," Sen. Joe Manchin, D-W.Va., said on Thursday afternoon.

Manchin's prediction comes as a development out of the House signaled that an agreement has been struck on the outstanding issues that were holding up both measures.

House Appropriations Committee Chairman Harold Rogers, R-Ky., will reopen the pending omnibus spending package that had been shelved earlier this week and rewrite language that sought to reinstate the President George W. Bush-era travel ban to Cuba, a move designed to address White House concerns and win the backing of Senate Majority Leader Harry Reid, D-Nev., according senior Republican and Democratic staffers.

Rogers was reluctant to make the move and is doing so, Republicans say, with the understanding from Reid that if the Cuba travel and gift language is dropped and President Obama's existing travel policy is protected, Reid will release the conference report for full House and Senate consideration. Rogers worked with Reid's staff late into Wednesday night and continued talks on Thursday morning. A deal announcing this arrangement is anticipated soon.

Conferees came within inches of an agreement on the spending bill Monday, but Democrats refused to sign the conference report in order to get more of what they want out of the payroll-tax bill. In response, on Wednesday night, Republicans took the contents of the conference report and released a separate package that House Speaker John Boehner, R-Ohio, intended to bring to the floor.

"It's bicameral, bipartisan, and it's done," Boehner told reporters.

The House Rules Committee is meeting at 3 p.m. to consider the stand-alone bill, but now the hope in top GOP and Democratic circles is the conference report will become the vehicle for consideration. If the deal doesn't mature in time, the Rules Committee will then take up the GOP's three-bill package that incorporates the conference agreement and does not change the Cuba language.

The White House also wants Republicans to reprogram funding for the Commodity Futures Trading Commission, arguing the already agreed-upon level is too low for the CFTC to adequately regulate the $600 trillion derivatives trading market - a new task assigned the agency in the Dodd-Frank financial regulations law. Obama signed the Agriculture Appropriations bill on Nov. 18. It set the CFTC's budget for 2012 at $205 million, a $3 million boost from 2011 and $103 million less than the White House request.

House Republicans consider the matter of CFTC funding closed and have no intention of renegotiating funding for the agency that's already been signed and approved by Obama.

"Things are looking up, and I'm looking up," said Rogers in the House Speaker's lobby, putting his hands together with eyes looking up, as if praying.

"We're making some progress," he continued. "I'm feeling optimistic. I'm optimistic that the senators will be released to sign the conference report. So, we'll have the bill pending as well as the conference report." Asked if that would happen on Thursday, Rogers again said he was optimistic.

"There are just a few things yet to be concluded" in negotiations, he said. He would not detail those items, but said House GOP members will be given an update on the status of talks at a closed-door conference later on Thursday afternoon.

Bringing the conference report to the floor on Friday is "under discussion," Rogers said.

To make that deadline, the House rule requiring that a measure be introduced three days before it is considered on the House floor must be waived.

The continuing resolution funding most the government expires at midnight Friday. Some talk of passing another short-term resolution to keep the government lights on while lawmakers hash through their differences continues but will likely be moot if Congress manages to send the omnibus to Obama by Monday morning.

Progress was also under way on the Senate side, where leaders say they are shifting from public politicking to deal-making.

After meeting with Minority Leader Mitch McConnell, R-Ky., Wednesday evening, Reid said on Thursday: "The Republican leader and I have been in discussions.... 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."

He said the year-end bill would include a payroll tax extension, extended federal unemployment benefits, tax extenders and a so-called "doc fix" preventing physicians who accept Medicare from taking pay cut.

McConnell agreed with Reid's assessment.

Republicans said the shift on Thursday reflected Democratic concessions. Democrats believe they enjoy a political advantage battling the GOP over extending the payroll-tax cut and unemployment benefits - an assessment many Republicans privately share.

Billy House and Ben Terris contributed to this report.