Republican lawmakers escalated a year-end showdown with the White House, putting off a vote on extending a payroll tax holiday demanded by President Barack Obama until Tuesday.
Party leaders in the House of Representatives rejected a compromise hammered out by Democrats and Republicans in the Senate and promised to hold a vote on appointing negotiators to strike a new deal on the issue with senators.
But Democratic leader Harry Reid has refused to bring back the Senate from its Christmas and New Year vacation to take up any new measure from the House, leaving Congress sliding deeper into a standoff with no easy exit.
If the payroll tax cut extension is not passed by the end of the year, 160 million Americans could see their taxes go up by $1000 in 2012, and thousands of jobless workers could lose their unemployment benefits.
The Senate compromise worked out Saturday extended the payroll tax cut at its lower rate of 4.2 percent for two months.
But Republican House Speaker John Boehner said his members agreed that two months was not long enough and want to extend the tax holiday by a year, in line with a plan originally pushed by President Barack Obama.
“We are here, we are willing to work,” said Boehner, daring Democrats to allow the row over the payroll tax cut extension to drag on through the holiday period.
Obama has said he will not begin his Christmas and New Year vacation in his native Hawaii until the payroll tax holiday, designed to stimulate the economy, is extended and unemployment benefits are also assured.