President Obama says Congress should stay in session until both the spending bill and the payroll tax cut measure have passed.

Story highlights

The appropriations measure goes to the Senate, which also is expected to pass it

The nearly $1 trillion spending plan keeps the government funded through September

Senate negotiators propose a two-month extension of the payroll tax cut

Washington CNN  — 

A compromise spending bill to keep the government funded for the rest of the fiscal year won approval Friday from the House of Representatives, the first step toward averting a partial government shutdown at midnight.

The nearly $1 trillion measure passed on a 296-121 vote and now goes to the Senate, where approval is also expected.

A Senate vote is likely on Saturday, and Senate leaders said the presumption of the measure’s approval will prevent a partial government shutdown when current authorization for government funding ends at midnight Friday.

Senate Majority Leader Harry Reid, D-Nevada, said that under a White House ruling, “if one house passes a spending bill …. and there’s a presumption it will pass in the other body, the time is extended for 24 hours.”

“So everyone doesn’t have to worry about the government closing tonight,” Reid said.

A one-day continuing resolution was passed by the Senate Friday and signed by President Barack Obama to keep the government funded through Saturday’s expected vote.

Meanwhile, the House headed out for its holiday recess as scheduled after passing the appropriations bill, but Speaker John Boehner told reporters that members could be called back to Washington if the Senate passes a separate measure extending the payroll tax cut.

“The members will go home and if there’s a need to come back to finish our work, we will do so,” said Boehner, R-Ohio.

House Majority Leader Eric Cantor, R-Virginia, notified members they would get 24-hours notice of any pending votes if the Senate sends back a payroll tax-cut measure.

On Friday night, Senate negotiators were unable to reach agreement on a comprehensive payroll tax-cut plan and instead proposed a two-month extension. It was unclear if the plan would get eventual approval from the full Senate.

Obama has called for Congress to stay in session until both the spending bill and the payroll tax-cut measure have passed.

White House press secretary Jay Carney said Thursday that Obama didn’t want to risk American workers facing a higher payroll tax rate in January on the promise that legislators will return from vacation to pass the payroll tax-cut plan by year-end.

The two major pieces of legislation became linked this week in political maneuvering involving the White House and Senate leaders.

Congressional negotiators signed off on the government appropriations plan Thursday night. The giant spending package appropriates money for the rest of fiscal 2012, which ends September 30, at levels agreed to in the debt-ceiling agreement in August.

Without the spending bill, authorized government funding would end at midnight Friday, causing a partial shutdown.

At the same time, Obama and Democrats have pushed for the separate measure that would prevent the payroll tax cut enacted last year from expiring at the end of this month.

A Democratic effort to delay action on the spending plan – which was agreed to by a bipartisan conference committee – until resolution of the payroll tax cut issue fell apart in talks between party leaders that began Wednesday night.

“We forced them to go ahead and sign the conference report and get that done so that the government doesn’t shut down, and we feel victorious on that,” Rep. Phil Gingrey, R-Georgia, said Friday.

With House approval of the spending plan, the onus of legislative action fell on the Senate, where a deep partisan divide had stalled progress on the payroll tax-cut measure until negotiations began in earnest Thursday.

The Senate talks involve extending the payroll tax cut and other provisions that expire at year-end, including an extension of unemployment benefits and an increase in payments to doctors who provide Medicare services.

Democrats want these programs to be extended through 2012 , but they had floated the idea of a fallback two-month extension to ensure that there will be no negative impact on Americans if Congress fails to reach a broader deal.

A Senate Democratic leadership aide said the two-month extension would clear the way for further negotiations on a larger deal.

However, Boehner said Friday that any attempt for a short-term extension of the payroll tax cut and unemployment benefits would be altered in the House, in particular by adding a controversial provision to speed government approval of the Keystone XL oil pipeline from Canada.

According to congressional sources, and confirmed by Republican Sen. John Thune of South Dakota, the two-month plan proposed by Senate negotiators Friday night included the oil pipeline provision. It also would extend the lower payroll tax rate, unemployment benefits and the increased payments to Medicare doctors.

The Obama administration has delayed until 2013 a decision on the pipeline that would transport oil from Canada’s tar sands production facilities in northern Alberta to refineries on the Gulf Coast of Texas.

The delay followed complaints by environmentalists and Nebraska officials that the pipeline route could threaten that state’s Sandhills region and vital Ogallala aquifer. Alternate routes are being considered, and Nebraska officials as well as the pipeline company, TransCanada, acknowledge that the process of approving a final route will last into the second half of 2012.

Republicans, who traditionally back the oil industry, accuse Obama of delaying the issue until after his re-election bid next year for political reasons.

In the House, they added the provision to require a decision on the Keystone project within 60 days, arguing it would create jobs and reduce U.S. dependency on Middle East oil. The House version lacked Senate support and never came up for a vote.

The State Department, which has final authority to approve the oil pipeline, warned that the shortened deadline for a decision on the pipeline would effectively kill the project, because there would be insufficient time to assess the route alteration.

The legislative maneuvering was a last-gasp bid to end weeks of political wrangling that threatened a partial government shutdown and raised public frustration with Congress even further.

A poll released Thursday by the Pew Research Center for the People and the Press showed public discontent with Congress at record levels, with two-thirds of voters saying most lawmakers should be voted out of office next year.

CNN’s Ted Barrett and Kate Bolduan contributed to this report.