Brian Beutler December 16, 2011, 11:41 AM

With a government shutdown averted, the final item on the Congressional agenda before the year’s out is to finalize legislation to renew the payroll tax, extend unemployment benefits, and temporarily fix the Medicare payment formula so that doctors don’t take a huge pay cut on the first of the year.

Senate Dem and GOP leaders say they’re nearing agreement on such a package, which will be offset with budget cuts and savings, but not with a surtax on millionaires, which Dems finally, officially dropped Thursday night.

So here’s the plan now: Later today, the House will pass legislation to fund the government, averting a shutdown. House members will leave town for the weekend while the Senate hammers out its final compromise — which barring a snag, could pass this weekend with little fuss.

If that happens, House Speaker John Boehner has told members that they’ll be called back from recess to vote on this extenders package, with 24 hours notice. Once that’s done, then the issue’s off the table for good. Unless, that is, there’s a problem with the payfors.

As a backstop, if negotiations fail, the Senate could pass a two month extenders package and revisit the issue after the holidays. Republicans don’t like this option because it means they’ll be exposed politically, with less leverage and President Obama in full campaign mode. Boehner has told his caucus that if the Senate sends over a two month bill, they’ll amend it significantly — including with that provision forcing the administration to make a final call on the Keystone XL pipeline within two months — and pick this fight all over again.

That’s the one way this all falls apart.

Doc fix, Government Shutdown, Harry Reid, John Boehner, Keystone XL, Mitch McConnell, Payroll Tax Cut, Unemployment