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House rejects payroll-tax deal. Is it now dead?

The House rejected the Senate's temporary payroll-tax deal Tuesday, leaving no clear way out of the impasse. The House wants more discussions, but the Senate says it's done talking.

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“Our failure to do this could have effects not just on families but on the economy as a whole,” President Obama told reporters at a surprise White House briefing after the House vote.

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In response, Mr. Boehner called on the president to “show real leadership” and pressure Senate Democrats to return to Washington to negotiate a new bill before these measures expire on Jan. 1.

"There's no reason we can't solve this in short order," he said at a press briefing after the vote. "Our negotiators are here, ready, and able to work.”

After Tuesday’s vote, Boehner named eight House Republicans to serve on the proposed conference committee, which may never meet. House GOP leaders and conferees plan to be available in Washington through the holidays.   

“Why would people go on their vacations when we have such an important bill left to resolve for the American people?” says Rep. Kevin Brady (R) of Texas, vice chair of the Joint Economic Committee and one of the conferees on the proposed new panel.

But Senate Democrats are standing their ground. Senate majority leader Harry Reid (D) of Nevada says he will not call the Senate back into session or even appoint conferees to meet with the House. Nothing happens until the House agrees to take the Senate bill back to the floor for an up-or-down vote, he says.

The wildcard is how constituents, polls, and the markets respond to gridlock on Capitol Hill and uncertainty over whether these measures will be renewed in time. Both sides are counting on the other to cave to a negative public reaction.  

If past fiscal crises are any indication, this standoff could go down to the wire. 

“It’s hard to see how Republicans move from this,” says Stan Collender, a longtime federal budget analyst now with Qorvis Communications in Washington. “But a lot of people expect that it will be like every budget fight this year and go down to the very, very, very last minute.”

RECOMMENDED: Why 'temporary' tax cuts never die: Payroll tax and 3 other examples

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