–Optimistic Comments By Congressional Leaders Give Hill New Hope
–Intense Talks Underway To Complete FY’12 Omnibus, Payroll Tax Cut
–Unclear If Final Votes Can Occur This Weekend Or Early Next Week

By John Shaw

WASHINGTON (MNI) – The grim scenarios of a possible government
shutdown and another round of self-defeating brinksmanship by both
parties dissipated on Capitol Hill Thursday and lawmakers have
grown optimistic that an end-of-the-year agreement is near.

Key lawmakers and staffers are now involved in intense talks to
complete the final details of a massive $900 billion omnibus spending
bill for the 2012 fiscal year and a payroll tax cut extension
package that also extends unemployment insurance benefits.

The talks now underway are seeking to nail down these packages and
develop the offsets to pay for the payroll tax cut extension bill.

It seems possible that a broad agreement can be reached later
Thursday night or Friday with votes as early as Friday or Saturday. But it could
be that final votes House and Senate will be delayed until early next
week, congressional staffers say.

The new mood of optimism that has swept over Capitol Hill arrived
Thursday morning like a thunderbolt and it came from two of the most
unlikely of people: Senate Majority Leader Harry Reid and Senate
Minority Leader Mitch McConnell.

The two dour, often grumpy, Senate leaders have opened the Senate
most mornings this year with a now ritual exchange of angry
recriminations.

But on Thursday morning, Reid and McConnell shocked Washington by
beginning the day with words of hope.

Speaking first, Reid said the two Senate leaders had done enough
“back and forth” and now needed to get reach an agreement.

“We’re going to try to do during the next few hours is try to work
toward resolving some of the outstanding issues,” Reid said.

Reid said there were only a small number of issues left to resolved
on a $900 billion FY’12 omnibus spending bill and added “those issues
should be resolvable.”

He said that he and McConnell are also in talks on a compromise
payroll tax cut extension package.

“We hope we can come up with something that would get us out of
here at a reasonable time in the next few days,” Reid said.

A stop-gap bill funding much of the federal government will expire
Friday. House and Senate appropriations leaders have been working for
weeks on an FY’12 omnibus that will include the nine FY’12 spending
bills that have not yet been approved.

McConnell was also hopeful in his Thursday morning remarks. “We’ve
been in useful discussions about how to wrap the session up,” McConnell
said, adding that the omnibus and the payroll tax cut extension are the
final big issues left for this session of Congress.

“We’re confident and optimistic we’ll be able to resolve both on a
bipartisan basis,” McConnell said.

Speaking about an hour later in back to back briefings, both House
Speaker John Boehner and House Minority Leader Nancy Pelosi seemed
cautiously optimistic that an agreement can be reached.

Speaking first, Pelosi said bipartisan talks are underway to
assemble a payroll tax cut extension package, adding “I hope they will
be fruitful.”

Pelosi said Democrats want a “global agreement” that includes both
the FY’12 omnibus spending bill and an extension of the payroll tax cut.

Speaking next, Boehner also took a more conciliatory tone, saying
“there is no need to shut down the government.”

“There is an easy way to untangle all of this,” Boehner said.

Boehner said the White House and congressional Democratic leaders
should formally sign off on a final $900 billion omnibus spending bill
rather than delaying their consent on it until there is an agreement on
the payroll tax cut extension bill.

“The bill is done,” Boehner said in reference to the FY’12 omnibus.

After Congress clears the FY’12 omnibus, Boehner said, bipartisan
work can continue on the payroll tax cut extension bill.

Congressional leaders had hoped to adjourn for the year Friday, but
the deadlock on the payroll tax cut extension and the omnibus spending
bill will likely push back this adjournment date until early next week.

** Market News International Washington Bureau: (202) 371-2121 **

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