The House passed its payroll tax cut Christmas tree of a bill yesterday, with a minimal amount of defections from the conservative wing of the caucus. The final vote was 234-193. Fourteen Republicans voted against the measure, while ten Democrats (Barrow, Boren, Boswell, Braley, Cardoza, Donnelly, Loebsack, Matheson, Ross, Walz) voted for it. The President has promised a veto, and the bill is DOA in the Senate.

Senate Majority Leader Harry Reid is attempting a high-stakes gamble, tying the payroll tax/unemployment insurance legislation that the House will vote on today with the omnibus spending bill to avoid a government shutdown. Without compromise on the former, according to Reid, the latter cannot pass, increasing the risk of a government shutdown.

Two major year-end pieces of legislation were readied yesterday, and in this case, House and Senate negotiators reached agreement on the measures, expecting to pass them by the end of the week. First, appropriators agreed to a $1 trillion omnibus spending bill covering the rest of the fiscal year (to September 30 of next year) on domestic spending. They also agreed on the defense spending bill, which still allows indefinite detention of suspects.

The public’s ranking of the honesty and ethics of members of Congress is at the lowest level it has ever been according to Gallup’s polling. While Congress has never been looked on too kindly, the level of distrust the American people now feel towards members of Congress is unprecedented.

Republicans have insisted that Congress will eventually come to an agreement on the pressing year-end issues, namely the payroll tax cut, unemployment insurance, a “doc fix” to avoid a Medicare reimbursement cuts, and possibly some expiring tax breaks. But their version of “agreement” is predicated on the idea that the House will pass a bill with several objectionable features and everyone else will accept it. They essentially want to call the bluff of both Senate Democrats and the White House.

As a condition for extending the payroll tax cuts, the House will likely try to jam the Senate by passing some conservative piece of legislation with a bare majority and then leaving town, leaving a bill that includes means testing Medicare, reversing the EPA boiler rule, shifting authority for Keystone XL and cutting Affordable Care Act funds.

The main way that the US can insulate itself from the crisis in Europe is through continuing the fiscal state of emergency in the country, as the only ballast for growth. Unfortunately, we have a dysfunctional Congress, so the only way to realistically do this is to not slip backwards and turn fiscal policy negative by allowing several measures to expire at the end of 2012.

Legislators are supposed to the “public servants.” They work for us; we pay their salaries. So why do so many of them think it’s the other way around. One citizen had a chance to explain that to Rep. Don Young (R. Alaska).

Negotiators for the House and Senate reached agreement on a temporary spending bill that will fund the government through December 16 and also finish off a series of appropriations bills. We now see the true impact of budget freezes and austerity measures. One of the first victims is the Commodity Futures Trading Commission, which regulates derivatives.

I found last night’s 60 Minutes story on insider trading in Congress to be uneven, partially underwhelming and at times outright misleading. That Congress has access to insider information and can trade on that information is true, but some of the examples CBS cited were weak or unconvincing.