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House Republicans want changes to payroll tax deal House Republicans want changes to payroll tax deal
(about 1 hour later)
US House Republican leaders have said they will reject a bipartisan package on a short-term tax break for workers, in Congress' latest budget stand-off.US House Republican leaders have said they will reject a bipartisan package on a short-term tax break for workers, in Congress' latest budget stand-off.
The House votes later on the deal but Speaker John Boehner said he wanted the payroll tax holiday renewed for a whole year, instead of just two months. With a House of Representatives vote due later, Speaker John Boehner said he wanted the payroll tax holiday renewed for a whole year - not just two months.
The Senate bill passed with bipartisan support at the weekend, but then rank-and-file Republicans united against it. The Senate bill passed with bipartisan support on Saturday, but then rank-and-file Republicans united against it.
The White House said Mr Boehner had been swayed by a "Tea Party revolt".The White House said Mr Boehner had been swayed by a "Tea Party revolt".
If Congress cannot reach a deal by the end of this month, the payroll tax rate will rise by 2% in the new year, which analysts warn could hurt a fragile economic recovery.If Congress cannot reach a deal by the end of this month, the payroll tax rate will rise by 2% in the new year, which analysts warn could hurt a fragile economic recovery.
The package, supported by President Barack Obama, would also extend benefits for the long-term unemployed and avert deep cuts to doctors' Medicare fees.The package, supported by President Barack Obama, would also extend benefits for the long-term unemployed and avert deep cuts to doctors' Medicare fees.
Public confidence in Congress has hit historic lows after a series of bitter and last-minute fights between Democrats and Republicans over spending and taxes.
'Make-or-break''Make-or-break'
Mr Boehner told a news conference on Monday that he expected the House to reject the Senate bill in Monday evening's vote, and then request negotiations.Mr Boehner told a news conference on Monday that he expected the House to reject the Senate bill in Monday evening's vote, and then request negotiations.
"Americans are tired of Washington's short-term fixes and gimmicks," he said. "Americans are tired of Washington's short-term fixes and gimmicks," he said. "We oppose the Senate bill because doing a two-month extension instead of a full-year extension causes uncertainty for job creators."
"We oppose the Senate bill because doing a two-month extension instead of a full-year extension causes uncertainty for job creators." Mr Boehner said that Democrats should be willing to work until a deal had been reached, and follow President Barack Obama's example, who has promised to delay his Hawaii vacation until the issue is settled.
Democrats accused Mr Boehner of reneging on a deal brokered by Senate Republican leader Mitch McConnell and his Democratic counterpart Harry Reid.Democrats accused Mr Boehner of reneging on a deal brokered by Senate Republican leader Mitch McConnell and his Democratic counterpart Harry Reid.
Democratic Senator Charles Schumer said approving the package was a "make-or-break moment" for Mr Boehner. Mr Reid said on Monday he would not be calling back the Senate if the House did not approve the bill.
"You cannot let a small group at the extreme resort to brinksmanship every time there is a major national issue and try to dictate every move this nation makes," he said. "I negotiated a compromise at Speaker Boehner's request," Mr Reid told reporters. "I will not reopen negotiations until the House follows through and passes this agreement that was negotiated by Republican leaders and supported by 90% of the Senate."
Senator Scott Brown of Massachusetts, a Republican facing a tough battle for re-election next year, was one of the 39 members of his party that voted for the Senate bill.
"The House Republicans' plan to scuttle the deal to help middle-class families is irresponsible and wrong," Mr Brown said in a statement.
The main disagreement is how to offset the cost of extending the tax break for an estimated 160 million American workers.The main disagreement is how to offset the cost of extending the tax break for an estimated 160 million American workers.
House Republicans said on Sunday they wanted to see tougher spending cuts in the legislation.House Republicans said on Sunday they wanted to see tougher spending cuts in the legislation.
If no deal is struck by 31 December, taxes would go up by about $1,000 (£643) for the average worker. If no deal is struck by 31 December, annual taxes would go up by about $1,000 (£643) for the average worker.
Correspondents say that since Republicans only reluctantly agreed to the payroll tax extension, voters might blame them any breakdown in negotiations. Correspondents say that since Republicans only reluctantly agreed to the payroll tax extension in the first place, voters could blame them for any impasse.
With an election year looming, Democrats would renew their argument that Republicans only favour tax cuts for the wealthy, not for the middle class.With an election year looming, Democrats would renew their argument that Republicans only favour tax cuts for the wealthy, not for the middle class.
The new stand-off on the payroll tax issue arose just as it appeared that Republicans had outflanked President Obama by tying a provision to the deal that would force him to make a decision early next year on a controversial pipeline. The new stand-off on the payroll tax issue arose just as it appeared that Republicans had outflanked President Obama by inserting a provision that would force him to make a decision early next year on a controversial pipeline.
The White House last month delayed a decision on the project until after next year's elections, in the face of strong objections from environmental groups and the US state of Nebraska. The White House last month delayed until after next year's elections saying whether or not it would approve the Keystone XL project, amid strong objections from environmental groups and the US state of Nebraska.