The House Tuesday rejected a plan backed by President Barack Obama that would have extended a payroll tax cut and jobless benefits for two months. The move raises the stakes in a holiday season clash that seems likely to result in a lapse in a tax cut enjoyed by 160 million workers.

Obama, in an appearance in the White House briefing room after the House vote, said the Senate bipartisan compromise is the "only viable way" to prevent a tax increase on Jan. 1.
"The clock is ticking. Time is running out," Obama said. He blamed "faction" of Republicans in the House for holding up the payroll tax cut extension.
House Republicans controlling the chamber want instead immediate negotiations on a year-long plan with the Senate — where the top Democrat again ruled out talks until the House passes the stopgap measure.
If Congress doesn't break the stalemate and pass a bill by the end of the year, payroll taxes will go up by 2 percentage points for 160 million workers on Jan. 1. Almost 2 million people could lose unemployment benefits in January as well, and doctors would bear big cuts in Medicare payments.