UPDATE 2-US lawmakers reach tentative deal to fund government

Mon Dec 12, 2011 9:31pm EST

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* House, Senate must vote in favor of spending bill

* Temporary funding measure expires Friday

By Rachelle Younglai

WASHINGTON, Dec 12 (Reuters) - U.S. lawmakers moved closer to a deal on Monday to fund the government through next year, potentially avoiding a shutdown that would have further damaged Congress' tattered reputation ahead of the 2012 election.

The group of Republican and Democratic lawmakers tentatively agreed on how to fund a wide range of government functions from homeland security to protecting the environment, congressional aides said.

Details were not immediately available and lawmakers were expected to publish the massive spending bill on Tuesday after hashing out remaining differences and assembling the legislation.

"There are still a couple of open items that need to be ironed out. These aren't deal breakers or game changers but are still important issues," said a Democratic spokesman for the appropriations committee in the House of Representatives.

A Republican aide said the group had a bipartisan, bicameral agreement in place on the entire spending package though noted that they still had to "make sure all our Is are dotted and our Ts are crossed."

The tentative deal comes after battles over how to trim the country's massive federal deficits brought the government to the brink of a shutdown and stripped the country of its top credit rating.

Congress has managed to pass bills to fund housing, agriculture, transportation and justice departments for the fiscal year ending Sept. 30, 2012.

But the rest of the government, including the health and education departments, are being funded by a temporary spending measure which expires Friday.

"Nobody wanted to have this thing drag out much longer than Friday," said Potomac Research policy analyst Greg Valliere.

As part of this summer's fight to raise the country's debt limit, lawmakers had agreed to cap discretionary spending at $1.043 trillion -- a $6 billion reduction from last year's levels.

Regardless, Democratic lawmakers have been squabbling over Republican attempts to restrict funding for the Obama administration's health care act and consumer financial protection bureau, among other things.

The House of Representatives and the Senate must vote in favor of the spending bill in order to keep major parts of the government operating beyond Friday.

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