Congress reaches deal on 2016 spending bill to fund federal government

Erin Kelly | USA TODAY

WASHINGTON — Congressional leaders reached a tentative deal Tuesday night on a $1.1 trillion spending bill that would end the threat of a year-end government shutdown and fund federal agencies through most of 2016.

Details of the massive bill had still not been posted online by the House or Senate appropriations committees late Tuesday, but House Speaker Paul Ryan, R-Wis., told GOP members that an agreement had been reached. Democratic leaders cautioned that final details were still being worked out.

Funding to keep the government running is set to expire at midnight Wednesday. Ryan said lawmakers will vote Wednesday on an extension to keep the government open until Dec. 22. That gives Congress time to approve a long-term bill to fund agencies through September.

Ryan promised that there will be no government shutdown and said the House will vote Thursday on a long-term agreement. The Senate will vote on Thursday or Friday, just in time for Congress to adjourn for the holidays.

Republicans wrangled with Democrats over proposed policy riders on issues ranging from the environment to the Syrian refugee crisis.

"We didn't win everything we wanted," Ryan said on Fox News, without offering details. "Democrats got some things they wanted. So that's the nature of compromises in divided government. But all told, we'll make sure that we keep government funded and that we advance some of our priorities and, namely, that's to create jobs."

Senate Minority Leader Harry Reid, D-Nev., said the final sticking point Tuesday was Republicans' demand to lift a 40-year ban on the export of U.S. crude oil. Democrats agreed to lift the ban, but only after they apparently won a five-year extension of tax credits for wind and solar energy. They also beat back Republican efforts to derail President Obama's clean air and climate change regulations.

"We've made it clear that if they want this oil export ban, there must be included in this (bill) policies to reduce our carbon emissions and encourage use of renewable energy," Reid said Tuesday morning.

Lawmakers compromised on the issue of allowing Syrian refugees into the U.S. The spending package doesn't include a controversial House-passed bill that would bar the refugees from entering until the U.S. implements a tough new vetting system to ensure they aren't terrorists. Instead, it includes a bipartisan bill that would impose new travel restrictions on citizens of the 38 countries that can enter the U.S. without visas. Residents of those countries would be blocked if they have traveled to Syria, Iraq, Iran, or Sudan in the past five years.

The spending bill is expected to be paired with legislation that would extend about $750 billion in expiring tax breaks for businesses and individuals. Democratic Whip Steny Hoyer of Maryland said Tuesday that Democrats will oppose the tax bill, which the House is expected to vote on separately from the spending measure. Hoyer called it "too big and expensive."

Rep. Keith Ellison, D-Minn., said last week that extending the tax breaks would cost the U.S. Treasury billions of dollars that could be better used for social programs for struggling Americans.

Ellison said it is part of a long-term Republican strategy to shrink government. With huge tax breaks in place, “It will be harder for us to pay for things next year," he said.

"We’re not getting any new revenue so what is there left to do but cut, cut, cut?" said Ellison, who is co-chairman of the House Progressive Caucus.

Ryan said that extending tax breaks for businesses will help create jobs.

"We’re going to have some good things in here for job creators," he said. "We’re going to have good tax policy that helps send us in the right direction for tax reform, that helps provide certainty for businesses."

The bill would postpone for two years taxes that were supposed to help pay for Obamacare, including the so-called "Cadillac tax" on expensive health insurance plans provided by some employers. That tax was supposed to take effect in 2018 but would be delayed until 2020. A tax on medical device manufacturers also would be eliminated for two years.

Democrats did get one tax break they sought — a permanent extension of the child-care tax credit.

"Even though something like the child tax credit and the rest are in that part of the bill, giving away so much to corporate America is just too much," said House Minority Leader Nancy Pelosi, D-Calif.

Contributing: Paul Singer