Aide: Deal to fund government nearly done

WASHINGTON - JULY 25: U.S. Senate Majority Leader Sen. Harry Reid (D-NV) (R) speaks as Sen. Charles Schumer (D-NY) (L) listens during a news conference discussing the latest development of the debt ceiling negotiations July 25, 2011 on Capitol Hill in Washington, DC. After a weekend of stalled negotiations House and Senate leaders formally unveiled competing backup plans to raise the federal debt limit in order to meet the Aug. 2 deadline.
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Updated at 12:35 p.m. ET

(CBS News) Leaders in Congress are close to announcing a potential deal to keep funding federal operations past September 30, a Republican House aide confirms to CBS News. If the deal passes and is signed by the president, it would avert a government shutdown.

To address the lack of a new budget agreement for the next fiscal year, the likely deal would extend spending for another six months after the 2012 fiscal year closes at the end of September. Leaders have agreed to cap spending at $1.047 trillion, as agreed to in the debt deal Congress reached last August.

The potential deal, however, is likely to anger conservative Republicans who wanted to reduce spending further. The GOP-led House in March passed a budget calling for $1.028 trillion in discretionary spending in 2013.

If the deal is finalized, Congressional leaders are expected to announce it this afternoon, according to the House aide. The bill would be written in September.

Should Congress reach a deal, it will only temporarily resolve one of the legislative body's fiscal challenges. Lawmakers still have multiple issues they must address before the end of the calendar year, including whether to extend all or part of the Bush-era tax cuts that are set to expire this year.

Congress is also searching for a way to avoid "sequestration," the $1.2 trillion in spending cuts -- half coming from the Defense Department and half from domestic programs -- slated to go into effect in January. The cuts were enacted as part of the August debt deal, since the so-called congressional "supercommittee" that was formed to find budget savings failed to reach a deal.

CBS News producer Jill Jackson contributed to this report.


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