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House and Senate leaders could reach a deal tonight on extending the payroll tax cut, jobless benefits through the end of the year, putting a pause on one of Capitol Hill's longest running fights until after November's elections. Politico's Manu Raju and Jake Sherman and The Hill's Bernie Becker have details of the emerging bargain:

  • Extend the payroll tax cut of 2 percent for the rest of the year, with the $100 billion cost not offset by any spending cuts.
  • Extend unemployment benefits for the next 10 months at a cost of $30 billion. 
  • Offset the $50 billion "doc fix" -- which prevents doctors who accept Medicare from getting a big cut in how much the program pays for their services -- with other budget cuts.

Republicans said Monday they'd be willing to extend the payroll tax holiday without demanding cuts elsewhere in the budget, and some Republican members of Congress were unhappy with the decision even as their leaders felt they had "boxed in" Democrats, as The New York Times reported. Separating the popular payroll tax break from the other less popular items would make it easier to force spending concessions from Democrats. But now a deal on all three things seems near. Roll Call's Meredith Shiner reports that the latter two items will probably be paid for with changes to federal workers' pensions and by auctioning off slices of the broadcast spectrum.

Despite Republicans saying Monday they were open to passing the payroll tax without paying for it, President Obama continued to pressure Congress to pass the legislation Tuesday. He wouldn't believe it till a photo of him signing the bill was posted on the White House's Flickr page. "Until you see a photo of me signing the bill at my desk — and make sure [the photo is] verified and certified. If it’s not on the White House Web site, it hasn’t happened," Obama said.

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