House vote could mean Jan 1 tax increase

House Republicans on Tuesday rejected a short term, bipartisan Senate agreement to extend an expiring payroll tax cut and unemployment insurance, setting up their most politically risky showdown yet with Democrats and President Obama just days before Christmas.

The House voted 229-193 against the Senate plan, which would extend by two months a 2 percent reduction in payroll taxes for 160 million American workers as well as benefits for the unemployed. Both expire at the end of the month unless the Senate and House can agree on a new compromise.