A marathon final legislative push came to a close on Monday morning when the House and Senate approved a plan to eliminate the state's nearly $3 billion budget deficit. Legislative leaders and Gov. Tim Pawlenty reached agreement on the deal after weeks of acrimony and one last day of negotiations.

When Gov. Tim Pawlenty and legislative leaders announced late Sunday night that they'd reached a deal to close the state's nearly $3 billion budget deficit, the session was expected to be over in a few hours. But the approval process has dragged on much longer than anticipated.

Gov. Tim Pawlenty and the DFL-controlled legislature have apparently reached a deal to close the state's $3 billion deficit. But facing a midnight cutoff for any legislative votes, there's no time to get the agreement passed by the House and Senate.

DFL legislative leaders have put forth a second proposal aimed at ending the budget impasse prior to the midnight deadline for passage. The key moving pieces: a revamped deal to salvage the General Assistance Medical Care Program and a bill authorizing early expansion of the state's Medicaid program if Gov. Tim Pawlenty or the state's next top executive opts to do so.

Margaret Anderson Kelliher has just announced a joint House and Senate counter-offer to Governor Pawlenty's proposal. The DFL's "Governor Opt-in Offer" calls for a new bill which would prevent a special session.

With time quickly running out on the legislative session, Gov. Tim Pawlenty has put forth a new proposal to settle the state's nearly $3 billion budget deficit. The deal would include $1.8 billion in accounting shifts and all of the unilateral budget cuts that Pawlenty made last year. It would also rely on $408 million in federal Medicaid dollars that have not yet been appropriated by Congress, but are expected to pass later this year.

Shortly after legislators began gathering on the House floor Sunday afternoon, House Minority Leader Kurt Zellers (R-Maple Grove) told us on the chamber floor that he believed there was "no way" Gov. Tim Pawlenty would sign a budget bill that includes the early expansion federal Medicaid program that Democrats want.

With less than a dozen hours left to do a deal, the last regularly scheduled game of chicken between Gov. Tim Pawlenty and the Minnesota Legislature comes down to this: Who will blink first over the inclusion of a federal Medicaid program in the budget?

House Speaker Margaret Anderson Kelliher described this afternoon's budget talks as "fairly positive." Senate Minority Leader Dave Senjem called the negotiating session "very productive." Brian McClung, spokesman for Gov. Tim Pawlenty, said "there's no reason we can't come together on this and conclude in a timely manner."

Reporters are camping outside the governor's office again at this hour. We've been hearing today that Gov. Tim Pawlenty has kicked the negotiations back to the Legislature, telling the Republican caucuses to come up with a budget proposal of their own and hash it out with Democrats.