This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/world-us-canada-16190660

The article has changed 5 times. There is an RSS feed of changes available.

Version 1 Version 2
Senate stalls on vote to extend US payroll tax cut Government shutdown fear hijacks US payroll tax row
(about 14 hours later)
Senate Republicans are rejecting calls for a quick vote on a payroll tax cut bill that passed the House on Tuesday. The threat of a US government shutdown is looming for the third time in 2011 amid division in Congress over how to resolve a payroll tax cut dispute.
The House bill would tie an extension of the tax break to provisions for a much-disputed oil pipeline, a clause Democrats and the White House oppose. Funding for federal programmes expires at the end of the week, but Democrats insist they will not pass a funding bill without solving the tax impasse.
Democrats - who hold a majority in the Senate - want to vote down the bill and begin negotiations with the House. Democrats, who control the Senate, have dropped demands to fund the renewed tax cut with a surcharge on millionaires.
But Senate Republicans say a separate financial bill must pass first, with a federal shutdown looming this weekend. But they object to Republicans linking the tax to an oil pipeline project.
The Senate majority leader, Democrat Harry Reid, said the resumption of party posturing was not helping resolve the issues. Republicans want the government to approve the Keystone XL pipeline linking Canada with the US Gulf Coast. They say it will create jobs and boost US trade.
The Obama administration has ordered an environmental review of that project, with results not expected until 2013.
'Partisan charade'
The payroll tax cut is due to expire at the end of December, with the White House estimating that taxes would rise for about 160 million Americans if it is not renewed.
The administration says a family earning $50,000 (£32,000) would pay $1,000 more in payroll taxes next year if Congress does not act.
President Obama has been vocal about the tax issue in recent weeks, challenging Republicans who espouse a low-tax philosophy to agree with his policy.
But while the two parties have agreed over the need to renew the tax break, they have differed over how to pay for it.
Republicans have proposed cutting benefits while Democrats called for a surtax on those Americans earning over $1m (£600,000). That demand appeared to have been dropped on Wednesday.
But while many observers - and congressman - insist that a tax deal will inevitably be reached, Democrats have now linked the issue to the latest deadline for renewing federal funding.
The Senate majority leader, Democrat Harry Reid, said on Wednesday that the tax issue should be resolved before any vote on a spending bill.
"The sooner we put this useless partisan charade behind us, the sooner we can negotiate a true bipartisan solution that protects middle-class workers," Mr Reid said."The sooner we put this useless partisan charade behind us, the sooner we can negotiate a true bipartisan solution that protects middle-class workers," Mr Reid said.
But Senate Minority Leader Mitch McConnell, a Republican, said: "We ought to finish our most immediate concern first," referring to the spending bill that must pass if federal agencies are to remain open beyond the end of the week. But Senate Minority Leader Mitch McConnell, a Republican, said his opponent had his priorities wrong: "We ought to finish our most immediate concern first."
Stop-gap
The looming deadline is the third time in 2011 that Congress has come close to failing to approve new funds to keep the government running.The looming deadline is the third time in 2011 that Congress has come close to failing to approve new funds to keep the government running.
But correspondents say Republican aides have raised the possibility of a backup measure to keep government running beyond the Friday deadline. The administration formally alerted government employees to the prospect of a shutdown on Wednesday, the Washington Post reported.
Pipeline 'rider' And the White House indicated that it would prefer Congress pass a continuing resolution - essentially a short-term measure approving stop-gap funding - that would fund the government for a defined period of time.
Failure to reach a deal extending the payroll tax cut before the end of the year would see taxes rise for about 160 million Americans, the White House has said. That solution, enacted several times already this year, would avoid a shutdown but force Congress to address the issue once again in 2012.
It says a family earning $50,000 (£32,000) would pay $1,000 more in payroll taxes next year if Congress does not act.
The deal would also extend benefits for the long-term unemployed and delay a reduction in doctors' reimbursements for Medicare.
Lawmakers are divided on how to offset the estimated $180bn cost of the measures.
Democrats have long argued for a tax on America's highest earners to offset the costs of extending the tax holiday, but correspondents say the party may abandon this demand to forge an eleventh-hour compromise.
Republicans want to see the cash recovered through spending cuts. They have also linked approval of the Keystone XL pipeline to the bill in an effort to extract a concession from the administration.
In November, the White House delayed approval of the project over objections from Nebraska and environmental groups.
The Obama administration has agreed to reassess the pipeline route, pushing a final decision on the project beyond the 2012 presidential elections.