By Sam Goldfarb, CQ Staff

Negotiators working to extend a payroll tax cut and two other politically sensitive measures expiring at the end of the month expressed cautious optimism Tuesday that they will reach a bipartisan agreement.

But with the House and Senate conferees showing little progress and the deadline in sight, Senate Democratic leaders have grown impatient and are threatening to move new legislation.

Majority Whip Richard J. Durbin said Tuesday that an agreement is needed by the end of next week on the bill (HR 3630) that would extend through 2012 the current Social Security payroll tax reduction, long-term unemployment benefits and a delay in cuts to Medicare payments to doctors.

“I mean, just take a look at it. We’re going to be here next week. We have a week break. Then what, one more week back in before the deadline? So, we’re pushing on the door here,” said Durbin, D-Ill.

A two-month extension (PL 112-78) was enacted in December, and Durbin said another stopgap may be needed. “I hope it doesn’t get to that,” he said. “We can’t lurch every 60 days into another threat of the economy being damaged by our inability to reach an agreement.”

But Senate Finance Chairman Max Baucus, a member of the conference committee, was more optimistic. Another short-term extension of the payroll tax at its current reduced rate of 4.2 percent to buy more time for negotiations is “very unlikely,” he said Tuesday.

“We will find a solution that has quite significant bipartisan agreement — about that I’m sure,” the Montana Democrat said.

Baucus said negotiators are inching forward on the most divisive issue before them, having begun talking behind the scenes about how to pay for the legislative package, which could cost as much as $160 billion over 10 years.

And Democrats on the conference committee are preparing to make an offer to Republicans regarding unemployment benefits. The proposal, which could be made as early as Wednesday, would address unresolved questions including how many weeks benefits would be paid and whether recipients should have to meet education requirements.

The looming expiration of federal unemployment benefits and the payroll tax cut is probably the biggest issue facing Congress this month, with members of both parties eager to extend the programs for both economic and political reasons. Lawmakers also want to extend the so-called doc fix before its expiration on March 1 triggers cuts in payment to doctors treating Medicare patients.

Leaders of both parties have expressed increased anxiety in recent days about the progress of the conference. Calling Republicans intransigent, Senate Majority Leader Harry Reid, D-Nev., said earlier that he is prepared to move forward on his own if the conference does not produce an agreement soon.

GOP leaders, including House Speaker John A. Boehner of Ohio, say Senate Democrats have not made serious efforts to reach a long-term plan with bipartisan support.

Michigan Republican Dave Camp, chairman of the conference and the House Ways and Means Committee, said Tuesday that it is important to “let the conferees work.”