US politicians who hoped to resolve any uncertainty over the so-called "fiscal cliff" before financial markets reopen on January 2 has run into trouble as the Republican-controlled House of Representatives objected to urgent legislation approved by the Senate in a New Year drama unlike any other in the history of Congress.
The No 2 House Republican, Eric Cantor, emerged from a party meeting to say: "I do not support the Bill."
Politicians indicated that they wanted more spending cuts in the largely tax-focused legislation and wanted to send it back to the Senate. House Republican leaders continued to meet.
They have very little time. Rejection by the House would mean that any fiscal deal would have to start all over again when a new Congress, with dozens of new members, is seated on Thursday.
The legislation at issue was only part of the grand deal President Barack Obama had hoped to make with politicians on addressing the country's chronic deficit spending. That means his administration and a bitterly partisan Congress face more showdowns on fiscal issues in the months ahead.
Economists, who had warned that the "fiscal cliff" combination of higher taxes on almost all Americans and deep spending cuts taking effect at the start of the year would spin the country back into recession, were warning that even a limited agreement to avoid it could still dent economic growth.
The deal under consideration on Tuesday tackled one of the most sensitive issues: higher taxes. The measure would be the first significant bipartisan tax increase since 1990. It would prevent taxes from going up on the poor and middle class but would raise rates on households earning more than 450,000 US dollars (£277,970) a year.
It also would also put off for two months more than 100 billion US dollars (£61.8 billion) in automatic spending cuts which were set to hit the Pentagon and domestic programmes starting this week, and it would extend unemployment benefits for the long-term unemployed.
The measure cleared the Democrat-controlled Senate on an 89-8 vote not long after midnight, hours after Vice President Joe Biden and Senate Republican Leader Mitch McConnell, veteran negotiators, sealed a deal. The top Republican in Congress, House Speaker John Boehner, briefed his party members on Tuesday, while Mr Biden met House Democrats. A Boehner aide said Republican leaders would not decide their course until a second meeting later in the day.
Mr Boehner pointedly refrained from endorsing the agreement, though he promised a vote on it or a Republican alternative right away. He is expected to encounter opposition from House conservatives, who oppose any tax increase at all.
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