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Congress Set for Payroll-Tax Battle as Republicans Balk

Congress is preparing for a final fight over fiscal policy this year, with the fate of a payroll tax cut for 160 million U.S. workers on the line, after House Republicans balked at a deal worked out in the Senate.

The House of Representatives returns to Washington today to either change a Senate-passed bill extending the tax cut through February or seek a House-Senate meeting to resolve differences between the two chambers. The Senate passed its plan by 89-10 two days ago. The two-percentage-point cut in the payroll tax will expire Dec. 31 if Congress doesn’t agree to extend it.