The U.S. House of Representatives rejected a two-month extension of an expiring payroll tax cut, escalating a clash with the Senate and President Barack Obama that may result in smaller paychecks for workers in January.
In a 229-193 vote, the House requested formal negotiations on a payroll tax cut extension with the Senate, where Democratic leaders say they won't discuss a year-long agreement until the short-term deal is completed. All House Democrats joined seven Republicans in voting against the Republican rejection.
The impasse might hurt consumer spending and economic growth. If Congress can't reach agreement, the 2-percentage- point payroll tax cut would expire Dec. 31 and workers' paychecks would be reduced. Expanded unemployment benefits also would expire, and doctors would receive smaller Medicare reimbursements starting in January.
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