Congressional leaders—fearful of voters’ wrath over Washington’s bickering and brinkmanship—stepped back Thursday from a possible government shutdown, clearing the way for extending a payroll tax cut that is set to expire at year’s end.

The shift marked a dizzying change in tone from just hours earlier as leaders from both parties agreed to return to the bargaining table and put the finishing touches on a spending bill to keep the government operating after Friday. They also pledged to find a compromise to prevent a payroll tax increase on Jan. 1 and to extend unemployment benefits that are about to expire.

The intensified pace of negotiations paved the way for Congress to wrap up a bitterly partisan session by next week. That would end a year that has seen lawmakers lurch from one fiscal and political crisis to another—from a threatened government shutdown in April over spending cuts, to a near-default of the government last summer over raising the debt ceiling, to the latest showdown over payroll taxes—while seeing their approval with voters plunge.

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