WASHINGTON, Dec. 16 - Congressional leaders finally reached a new compromise on a $1 trillion spending bill for federal agencies under the remaining nine Appropriations bills for fiscal year 2012, including: Defense, Energy and Water, Financial Services, Homeland Security, Interior/Environment, Labor/Health and Human Services/Education, the Legislative Branch, Military Construction/Veterans Affairs, and State/Foreign Operations. House floor action is scheduled for Friday.


The appropriations package was practically a “done deal,” earlier in the week, but got tangled up in negotiations on extending the payroll tax cut, extending unemployment and other issues. But with just hours to go before the federal government would have been shut down, the two efforts were separated. Democrats insisted on removal of language that would have imposed stricter limites on travel to Cuba, essentially returning to policies established during the Bush Administration, and expanded funding for the Commodity Futures Trading Commission. Republicans got to keep language seeking to block new standards requiring more expensive and more efficient light bulbs.


Negotiations are continuing over how to fund a one-year extension of the payroll tax reduction, or, as a fall-back position, a two-month extension. The portion of the payroll tax that finances Social Security was cut from 6.2% to 4.2% to boost the economy a year ago, but would revert back to the higher level if Congress fails to act. The payroll tax bill is also expected to extend unemployment benefits and block a scheduled cut in Medicare payments to doctors.


President Obama threatened to veto the House-passed tax package because it includes spending cuts and and requires that he speed up a decision on the Keystone XL oil pipeline—changes he opposes. Citing environmental concerns, his administration delayed a decision on the pipeline until 2013, after the presidential election.




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