Breakthrough: Negotiators Near Deal to Extend Payroll Tax Cut

Evan Vucci / AP Photo

Multiple Capitol Hill sources say that a deal has "come together" this evening in the conference committee to extend the payroll tax credit for the rest of the year.

The deal, close to being formally struck but not yet finalized, would extend the payroll tax credit for the rest of the year. Two other expiring policies - unemployment benefits and the "doc fix" to exempt doctors who treat Medicare patients from getting a pay cut - would also be extended under the negotiated proposal.

The payroll tax credit portion of the deal would not be offset with the cost of spending cuts elsewhere. The other provisions would be offset by a combination of non-controversial spending reductions, which are still being ironed out now.

Several House and Senate aides close to the negotiation confirm that while it's still "premature" to say there is a final deal, "there are signs of progress."

The bill would still move through the conference committee, which has until now seemed deadlocked.

"Progress is being made and we are getting closer than in previous days, and we're still working," a GOP aide close to the negotiations said. "They're going to keep working until they have something that they can report full-fledged."

The proposal is awaiting approval from Speaker of the House John Boehner, R-OH, but the speaker is not expected to endorse the deal until he speaks with his conference.

Members of the House Republican leadership team met with Boehner in his office suite in the Capitol late Tuesday afternoon to discuss the deal. Members trickling out of the office after the meeting were tight-lipped about the prospects of a deal. A short time later, the House and Senate Republican conferees met privately in Chairman Dave Camp's Capitol office to discuss the path forward.

While Democratic sources indicate that "things are looking better," they too warn that the deal could still fall apart.

"Our work is not done until all three extensions are signed into law," said one Democratic aide close to the negotiations.

President Obama this morning signaled that nothing is agreed to until everything is agreed to and his signature is on a bill.

"Until you see me sign this thing, you've got to keep on speaking up. Until you see that photograph of me signing it at my desk -make sure it's verified, certified," Obama said from the South Court Auditorium at the White House. "If it's not on the White House website, it hasn't happened."