Top congressional negotiators said they were “very close” to reaching a deal on a payroll tax cut package.

GOP senators made it a rough debut for President Obama's acting budget director, Jeff Zients, who replaced Jack Lew.

WEDNESDAY'S BIG STORY: 

The long and winding road: Lawmakers are apparently inching closer to an agreement on a bill or bills that would extend the payroll tax cut, emergency unemployment benefits and the Medicare reimbursement rate for doctors through the rest of the year, with time running out to reach a deal before they expire at the end of the month. 

A deal could come as early as Tuesday night, although it was still uncertain as of this writing if that would happen. If a deal is reached, the House and the Senate will need to pass identical legislation — there's still a chance the payroll tax cut could be separated — then send it President Obama for this signature. 

Both chambers are scheduled to be out of session next week — although there was some talk of canceling the break if negotiators were still stuck — leaving only the first three days of the following week, tops, to push through a 10-month deal. 

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Natural gas and electricity trade groups are pressing the White House to ensure that regulations tightening controls on sprawling derivatives markets don’t create major new costs for energy companies that use them for protection against price volatility.

The groups want senior White House officials to weigh in with the Commodity Futures Trading Commission on its upcoming regulations that are among the various financial market reforms required under the sweeping Dodd-Frank financial reform law.

Seven groups including the Edison Electric Institute, the American Gas Association and the American Public Power Association on Tuesday wrote to White House Chief of Staff Jack Lew, National Economic Council Director Gene Sperling and Cass Sunstein, who is the top regulatory official at the White House Office of Management and Budget.

The energy companies, in a nutshell, worry that they’re getting unfairly swept up in rules to prevent the kind of freewheeling, risky Wall Street trading that helped spur the financial crisis.

President Obama’s budget proposes to cut Low Income Home Energy Assistance Program (LIHEAP) once again this year and both liberals and conservatives from northern states are angry.

The 2013 budget would fund LIHEAP at $3 billion, a cut of $470 million from this year. Last year, Obama proposed cutting LIHEAP from $5.1 billion to $2.55 billion.

In deficit negotiations with Republicans, the current level $3.5 billion was reached.

Rep. Ed Markey (D-Mass.) on Wednesday will release a new bill to keep heating assistance at least current levels.

In the Senate, members on both sides of the aisle are vowing to take steps to prevent further cuts.

“I am concerned that President Obama follows in the footsteps of past presidents by proposing deep cuts in the Low Income Home Energy Assistance Program.  For thousands of hard-pressed families in Vermont, LIHEAP is not a luxury but a survival tool,” Sen. Pat Leahy (D-Vt.) said in a statement.

“Last year, the Administration proposed cutting LIHEAP funding by nearly half.  While Congress worked to restore as much of this funding as possible, we have seen how dangerous it is for senior citizens and low-income families when this program is not sufficiently funded, ” Sen. Susan Collins (R-Me.) said in a statement

Sen. Olympia Snowe (R-Me.) said the proposed Obama cuts are an "insult to injury" for those dealing with $100 per barrel oil.

"By the White House’s own numbers this would result in a cut to Maine assistance of more than $20 million from last winter’s levels, or 40 percent, at a time when Mainers are taking desperate measures to avoid the bitter cold.  While the administration has woken up and abandoned their initiative to completely unravel LIHEAP, the budget should have heeded my request and reflected the dangerous state of thousands of Mainers and prioritized this critical program,” she said. 

Sen. Scott Brown (R-Mass.) also opposed to the cuts, an aide said.

Former Federal Reserve Chairman Paul Volcker is mounting a full-throated defense of the key financial reform effort bearing his name, arguing in a public letter to regulators that concerns aired by the banking industry are overblown.

The so-called "Volcker Rule" is a major component of the Dodd-Frank financial reform law, and is aimed at preventing banks from making risky trades with their own cash.

This ban on "proprietary trading" has been met by a full-court press from the financial industry, which is pressuring regulators to avoid a heavy-handed implementation that it says could stifle American competition and needlessly hinder markets.

But Volcker, who previously served as a top adviser to President Obama, dismissed those concerns in an eight-page letter sent to regulators Monday. Rather, he argued that since banks enjoy the backing of the government via entities like the Federal Deposit Insurance Corporation, the government must keep them on the straight and narrow — serving customers and not hunting for profits.

“I don’t have a view on it,” McConnell said of a stand-alone bill extending the break without offsets.

The Senate could try to amend a House payroll tax bill and send it back with an unemployment insurance extension.

House Minority Leader Nancy Pelosi said the conference committee should still work on unemployment benefits.