While most polling places in the state didn’t open until early Tuesday, the first votes were cast just after midnight in the tiny communities of Dixville Notch and Hart’s Location.

In Dixville Notch, former Massachusetts Gov. Mitt Romney and Jon Huntsman, the former Utah governor and ambassador to China, tied for the lead with two votes each. Former House Speaker Newt Gingrich and Rep. Ron Paul of Texas had one vote apiece.

And in Hart’s Location, Romney took five votes, Paul took four, Huntsman got two and Perry and Gingrich each received one.

President Barack Obama received all the votes in the Democratic primary in both locations.

Among Republicans, Romney is the long-time front-runner in Granite State polls, with 37% of likely primary voters giving him their support in polls published Monday and Tuesday.

New Hampshire is basically home field for Romney, who once governed neighboring Massachusetts and also owns a vacation home here. Romney also has spent lots of time over the past six years campaigning for himself and fellow Republicans in the state.

While there’s little apparent drama over which candidate will win the statewide contest, there’s plenty of interest in which candidates will come in second or third and gain momentum moving forward toward South Carolina’s January 21 contest.

The most recent Suffolk University/7 News poll, released Tuesday, puts Paul in second place, with 18% of likely GOP primary voters saying they will vote for him. Hunstman was third with 16% and former Pennsylvania Sen. Rick Santorum, fresh off a late surge and strong finish in the Iowa caucuses, polled fourth, with 11%. The poll has a margin of error of plus or minus 4.4 percentage points.

An American Research Group poll released Monday night gave Huntsman the second spot, with 18%. Paul was third with 17%, followed by Santorum with 11%. The AMR poll has a margin of error of plus or minus 4 percentage points.

Texas Gov. Rick Perry finished last in each poll, with 1% of the vote.

Despite his lead in the polls, Romney remained modest, telling reporters Monday in Hudson, New Hampshire, that, “right now what I’m worried about is winning in New Hampshire and hopefully having a margin larger than Iowa. I don’t think I can handle another night like that.”

Romney got eight more votes than Santorum in last week’s Iowa caucuses, the first contest in the presidential primary and caucus calendar.

While Romney weathered attacks from rivals, the candidates fighting for second and third place crisscrossed the state making pitches to voters.

In one of the latest polls, Paul is in the second spot. On Monday, the longtime congressman, who’s making his third run for the White House and had a strong third-place finish in Iowa, touted his plan to downsize government.

“In my first year, what I would do is cut spending at a federal level by one trillion dollars and that to show it’s the spending that counts and it’s very important that we cut spending,” Paul told voters in Stratham, New Hampshire.

Another new survey indicates that Paul is basically tied with Huntsman for second place. Huntsman, who has staked his White House ambitions on a strong showing in the state, told a packed town hall in Exeter on Monday that he has become a “shameless salesman” on behalf of his candidacy.

“Can you feel a little bit of momentum in the air?” Huntsman asked the crowd. “We’re going to surprise a whole lot of people in this country tomorrow night.”

Santorum’s seen his poll numbers in New Hampshire surge from single digits to the low double-digits, thanks to a near-win in Iowa, but he’s downplaying expectations.

Santorum on New Hampshire, sweater vests “We haven’t spent a penny on broadcast television here in New Hampshire. We’ve only spent five days campaigning here in the last month. We just came here starting at two or three points pretty much tied with Rick Perry in New Hampshire. We’ve been working hard and now into the double digits. Hopefully we can finish well,” said Santorum. “If we do better than these other two conservative alternatives, if you will, I’m hopeful that they’ll take a look at making sure we don’t keep dividing the vote and we can line up behind another candidate. But that’s their decision to make.”

Romney tops most national polling and is ahead in the latest surveys in South Carolina and Florida, the next two states to hold contests following New Hampshire. But being the front-runner invites attacks from those chasing the leader and Romney has had a bulls-eye on his back long before his rivals took shots at him in back-to-back debates over the weekend.

The attacks continued Monday after Romney, in a speech to the Nashua Chamber of Commerce, said he wanted Americans who were unhappy with their health care coverage to be able to switch insurance companies.

“I like being able to fire people who provide services to me,” he said. “You know, if someone doesn’t give me the good service I need, I want to say, ‘You know, I’m going to go get someone else to provide that service to me.’ ”

The first seven words of that sentence, “I like being able to fire people,” dangled like low-hanging fruit and some of Romney’s rivals pounced.

“It has become abundantly clear over the last couple of days what differentiates Gov. Romney and me,” said Huntsman, at a campaign stop in Concord. “I will always put my country first. It seems that Gov. Romney believes in putting politics first. Gov. Romney enjoys firing people. I enjoy creating jobs.”

“Our opponents are taking Gov. Romney’s comments completely out of context,” said Romney Communications Director Gail Gitcho. “Gov. Romney was talking about firing insurance companies if you don’t like their service. That is something that most Americans agree with.”

But the controversy fed the image of Romney that his GOP opponents and Democrats have pushed: That he’s a wealthy businessman who can’t connect to average Americans.

Rival candidates Monday also stepped up their attacks by questioning the former Massachusetts governor’s business background. In Manchester, Gingrich tore into Romney’s record in the private sector at the helm of Bain Capital.

Though Romney has said his work at the Boston-based private equity firm ultimately led to the creation of 100,000 jobs, Gingrich said Romney’s pursuit of wealth exacted a huge cost.

“What you have to raise questions about is, somebody goes out, invests a certain amount of money, say $30 million, takes out an amount, say $180 million — six to one return — and then the company goes bankrupt,” Gingrich said. “Now, you have to ask a question: Is capitalism really about the ability of a handful of rich people to manipulate the lives of thousands of other people and walk off with the money? Or is that, in fact, a little bit of a flawed system? And so I do draw a distinction between looting a company, leaving behind broken families and broken neighbors, and leaving behind a factory that should be there.”

Romney fired back that Gingrich and others were joining Obama in attacking the free enterprise system.

“As we’ll find out, free enterprise will be on trial,” Romney said. “I thought it was going to come from the president, from the Democrats, from the left, but instead it’s coming from Speaker Gingrich and apparently others.”

Gingrich, who has seen his front-runner status collapse and who finished a disappointing fourth in Iowa, is increasing his efforts to take on Romney. And an independent pro-Gingrich super PAC says it will spend $3.4 million starting Wednesday to flood South Carolina airwaves with ads that include clips from a film that attacks Romney’s record at Bain Capital.

Perry, the longtime Texas governor, was in New Hampshire for the weekend debates, but left Sunday afternoon for South Carolina, where he hopes to jump-start his now longshot bid for the nomination. Perry quickly jumped to front-runner status after entering the race in August, but his poll numbers collapsed after stumbles in debates in the fall.

He, too, was taking shots at Romney from South Carolina, where he tried to portray the former Massachusetts governor as an out-of-touch corporate raider with a long record of hurting workers.

Perry seized on a remark Romney made to voters in New Hampshire that he knows what it’s like to worry about getting a pink slip.

“I have no doubt that Mitt Romney was worried about pink slips — whether he was going to have enough of them to hand out,” the Texas governor said, making reference to Bain Capital. “With all the jobs that they killed, I’m sure he was worried that he’d run out of pink slips.”

Perry brought Bain Capital’s takeover efforts home to South Carolina, saying that Bain “looted” a photo company in Gaffney and a steel company in Georgetown.

The results in South Carolina could be crucial in determining which Republican will win the GOP nomination, and the results in New Hampshire could have an impact on the battle for South Carolina.

Romney, who is making his second bid for the GOP nomination, kicks off a full day of campaigning Monday by speaking at a chamber of commerce breakfast in Nashua, New Hampshire.

Romney has what amounts to home-field advantage as polls indicate the former governor of neighboring Massachusetts holds a large lead over the rest of the Republican White House hopefuls.

But being front-runner invites attacks from opponents, and it was anything but an easy Sunday morning for Romney, as he had the bulls-eye on his back at an NBC/”Meet the Press” debate in Concord, New Hampshire.

Asked about Romney’s electability in a race against President Barack Obama, rival Newt Gingrich called him a product of a liberal-leaning Massachusetts political culture who would “have a very hard time getting elected.”

The former House speaker, who has seen his poll numbers plunge over the past month and who came in a disappointing fourth in last Tuesday’s Iowa caucuses, also accused Romney of speaking “pious baloney” by claiming he left politics in the 1990s to try other things.

“You’ve been running consistently for years and years and years,” Gingrich said. “Just level with the American people.”

Romney responded by saying that he’s a consensus-builder who would be able to withstand the rigors of a “billion-dollar” campaign by Obama.

Sunday night Gingrich promised he would continue to contrast himself with Romney, saying in the morning his campaign would release “a little YouTube video of every tax he raised.”

In the debate, former Sen. Rick Santorum of Pennsylvania also took on Romney, asking why did Romney “bail out” on the Massachusetts people by not running for re-election for governor in 2006, a comment that caused Romney to laugh out loud.

“We want someone when the time gets tough, and it will in this election, we want someone who will stand up for conservative principles,” said Santorum, who finished an extremely close second to Romney in the caucuses.

Romney responded that New Hampshire voters can’t be fooled about the record of a governor from the state next door and said only someone with his experience in the business sector outside of Washington politics could defeat Obama.

Both Gingrich and Santorum are hoping for strong finishes in New Hampshire to propel them with momentum going into South Carolina, which holds the first Southern contest and the third in the race for the nomination, with its primary coming 11 days after New Hampshire. Gingrich kicks off seven events Monday by greeting voters in Dover, while Santorum has his first of six stops in Nashua.

Former Utah Gov. Jon Huntsman also had some sharp words for Romney. During the Sunday morning debate, as well as an ABC News showdown Saturday night, Romney knocked Huntman’s service as ambassador to China under Obama. Sunday afternoon, Huntsman fired back.

“I put my country first, Gov. Romney puts politics first. He talks about never apologizing for America. Well, I want the American people to know that I’ll never apologize for serving America. That’s who I am, that’s who I’ve always been, and I’ll take that philosophy to my grave,” Huntsman told reporters in Bedford, New Hampshire.

Huntsman starts Monday in Lebanon, New Hampshire, in the northern part of the state, before working his way south to the seacoast. Huntsman is placing all his chips in the Granite State. He skipped campaigning in Iowa to spend all of his time stumping here.

Rep. Ron Paul of Texas starts Monday greeting voters in Manchester. The longtime congressman who’s making his third run for the White House finished a strong third in Iowa, and he’s in second place in most polls of likely primary voters in New Hampshire.

Paul, who has the backing of many libertarians, predicted he will do well in New Hampshire because of his appeal among the 40% of Granite Staters who say they’re independent voters.

“I think the people here in New Hampshire are very independent minded, and I have a strong appeal because I have challenged both the Republican and Democratic Party leadership and that means they want a message of cleaning house,” Paul said in Meredith.

While five of the six major presidential candidates campaign throughout New Hampshire Monday, Rick Perry is in South Carolina. Perry showed up in the Granite State for the doubleheader of presidential debates, but quickly headed to South Carolina, where he hopes to jump-start his now long shot bid for the nomination. Perry quickly jumped to front-runner status after jumping into the race in August, but his poll numbers quickly collapsed after stumbles in debates in the fall.

As he greeted voters Sunday, Perry made it clear that he would make an aggressive push for “born-again” or evangelical Christians, who make up about 60% of the Republican electorate in the Palmetto State.

Six of the major Republican presidential candidates are barnstorming across Iowa on Thursday against a changing political landscape — a CNN/Time/ORC International poll released Wednesday showed support plunging for former House Speaker and onetime front-runner Newt Gingrich while onetime longshot Rick Santorum surged into the top three.

Santorum, campaigning on a shoestring budget, joked Wednesday night at a campaign event in Cedar Rapids that his bus “is a truck.” But he has visited all of Iowa’s 99 counties and he said his relentless efforts are paying dividends.

“It’s like any small-business person,” he told CNN’s Wolf Blitzer on “The Situation Room” on Wednesday. “If the money’s not coming in, you’ve just got to work harder, and that’s what we’re doing.

“We’re going up in the morning doing radio shows at 6 in the morning and going until 9, 10 at night and town meeting after town meeting. … Hard work pays off.”

In the Wednesday poll, 25% of those questioned said that if the January 3 caucuses were held today, they most likely would back former Massachusetts Gov. Mitt Romney, with 22% saying they’d support Rep. Ron Paul of Texas. Romney’s 3-point margin is within the poll’s sampling error.

Both Romney and Paul were each up 5 points among likely caucus-goers from a CNN/Time/ORC poll conducted at the start of December. The new survey indicated that Santorum, the former senator from Pennsylvania, is at 16% support, up 11 points from the beginning of the month, with Gingrich at 14%, down 19 points.

Santorum starts Thursday with what his campaign calls a “Faith, Family, and Freedom” town hall in Coralville. He has made a strong pitch toward social conservative voters, who are very influential among Iowa Republicans.

On Wednesday, Santorum was up with a new radio spot on Hawkeye State airwaves touting endorsements by social conservative leaders. His pitch may be starting to pay off.

“Most of Santorum’s gains have come among likely caucus participants who are born-again or evangelical, and he now tops the list among that crucial voting bloc, with support from 22% of born-agains compared to 18% for Paul, 16% for Romney, and 14% for Gingrich,” said CNN polling director Keating Holland.

It’s a different story for Gingrich, who starts Thursday with a campaign stop in Sioux City. Since Gingrich’s rise late last month and early this month in both national and early voting state surveys, he has come under fire from many of the rival campaigns. And his campaign blames the onslaught for the drop in the polls.

“Iowa’s a very small media market. You can basically blanket the airwaves if you have enough money. And I don’t care what candidate is in the race, if you have $9 million in negative advertising against them, (they are) going to drop in the polls,” Gingrich communications director Joe DeSantis told CNN’s Candy Crowley on “John King, USA” on Wednesday.

Rep. Michele Bachmann of neighboring Minnesota starts Thursday with a radio interview in Des Moines, and then speaks to reporters. She was at 9% support in the new CNN poll, trailing Texas Gov. Rick Perry by 2 percentage points. Wednesday night her state chairman abandoned ship — state Sen. Kent Sorenson showed up at a rally for Paul and backed the longtime congressman, telling the crowd that “I believe we are in a turning point in this campaign.”

Perry, like Santorum and Bachmann, is making a major effort to court social conservatives. A day after announcing his position on abortion had undergone a “transformation,” Perry sought to clarify that he would allow for exceptions if a mother’s life was in danger. On Tuesday, Perry told a crowd in Iowa that he had toughened his stance on abortion after viewing a documentary produced by former Arkansas Gov. Mike Huckabee, who won here in 2008 before later abandoning his presidential bid. Perry said he had changed his position to oppose abortion, even in cases of rape or incest.

As for the two front-runners, Romney is expected to emphasize jobs and the economy as he meets with voters in Cedar Falls. Paul begins his day of campaigning with a radio interview in Des Moines.

With a week and counting until the caucuses on January 3, one of the state’s top Republican leaders is amazed by Iowa’s most unsettled field of candidates so close to the finish line.

“It’s completely unprecedented to have a field and a cycle that has been this unpredictable, this turbulent late in the process,” Iowa Republican Party Chairman Matt Strawn told CNN.

Tim Albrecht, the Twitter-active spokesman for Iowa Gov. Terry Branstad, is also surprised.

“I have never seen this level of undecided voters this late in the process. It’s a crazy year in that regard,” Albrecht said.

Just think of Iowa as the GOP’s Midwestern mirror, reflecting back an image of uncertainty.

Simply put, there is no front-runner in this state. In the most recent Iowa poll from American Research Group, three candidates are virtually tied for the lead, with Rep. Ron Paul at 21%, former Massachusetts Gov. Mitt Romney at 20% and former House Speaker Newt Gingrich at 19%.

Most of the Republican candidates are in Iowa or on their way, canvassing the state in custom buses and rallying their supporters at town hall meetings. Gingrich started his day in Dubuque, while Michele Bachmann continued a 99-county tour in Council Bluffs. Romney is expected to launch his own bus tour in eastern Iowa on Wednesday.

One favorite in the upcoming caucuses, Paul, is viewed as unacceptable by a huge chunk of Republicans, according to the latest CNN-ORC nationwide poll.

Post-Christmas poll shows Iowa deadlock

Meanwhile, Gingrich, in an interview Tuesday with CNN’s Wolf Blitzer, spoke to those voters and hit Paul hard, saying the Texas congressman has a “record of systemic avoidance of reality.”

The other likely victors, Romney and Gingrich, are seeing their past moderate positions on a whole host of issues laid bare by bloggers and critics every day.

That leaves the conservative wing of the GOP field: Rick Santorum, Rick Perry and Bachmann. The problem is Santorum, Perry and Bachmann are splitting what would otherwise be almost a winning hand.

“There’s the Libertarian Primary, which Ron Paul is going to win. And then you got the moderate primary, which Gingrich and Romney are scrumming for. And you got three folks who are running as strong conservatives,” Santorum said at one of his events this week.

Still, Santorum declared the end may be near for him if he doesn’t do well in Iowa.

“If I finish dead last behind the pack, I’m going to pack up and go home,” Santorum said on Iowa radio station WHO.

One potential game changer is last week’s revelations about Paul’s incendiary political newsletters, which were distributed under his name in the 1980s and 1990s. The newsletters could be damaging enough to bring down the libertarian’s poll numbers. Paul claims he never read many of them.

Ron Paul pressed on newsletters

Gingrich, who has all but abandoned his pledge to stay positive, has pointed to the newsletters to question Paul’s electability.

Gingrich hinted he would not be able to support Paul as the Republican nominee.
I think Ron Paul’s views are totally outside the mainstream of virtually every decent American.
Newt Gingrich

“I think Ron Paul’s views are totally outside the mainstream of virtually every decent American,” Gingrich said on CNN’s “The Situation Room with Wolf Blitzer.”

Paul supporters could look to another anti-Washington crusader and Texan, who is spending heavily in the state. Perry and a political action committee supporting him have spent nearly $2 million on advertising in Iowa so far. And he thinks he has the right message for small government conservatives: Turn Capitol Hill into a part-time job for federal lawmakers.

Given the fact that members of Congress have roughly an 11% approval rating, it may be an effective ploy.

“I want you to answer this question — why should you settle for anything less than an authentic conservative who will fight for your views and values without an apology,” Perry asked a crowd in Iowa on Tuesday.
Why should you settle for anything less than an authentic conservative who will fight for your views and values without an apology?
Rick Perry

The other potential X-factor is the escalating war of words between Gingrich and Romney.

Gingrich’s campaign now refers to Romney as “Mitt the Massachusetts Moderate” in e-mails to reporters.

One such e-mail included a link to a local news video clip from Romney’s 2002 campaign for governor. In the video, Romney tells a reporter he’s “not a partisan Republican.”

“I’m someone who is moderate and that my views are progressive,” Romney told NECN, a New England cable news channel.

Romney is countering that blast from the past with a new ad promising a “conservative agenda” in the White House.

Romney also tweaked Gingrich’s comparison of his failure to make the ballot in the Virginia primary to a Pearl Harbor attack.

“I think it’s more like Lucille Ball at the chocolate factory,” Romney said, referring to the ’50s sitcom where the red-headed comedian has trouble keeping up with candy on a conveyer belt.

Part of the reason why Iowans are unsure about a front-runner might have something to do with the changing nature of the modern political campaign.

Iowa Republican leader Strawn says the GOP candidates have spent less time in the state than in years past.

Filling that void, Strawn says, are super political action committees airing attack ads.

“We want to get the decision right, but also we haven’t had as much opportunity to kind of kick the tires on these candidates as we have in caucuses past,” Strawn says.

The measure cleared the Democratic-controlled Senate and the Republican-controlled House of Representatives by unanimous consent, a procedural move allowing the measure to pass even though most members of Congress are now home for the holidays.

Among other things, the measure also includes a two-month extension of emergency federal unemployment benefits and the so-called “doc fix,” a delay in scheduled pay cuts to Medicare physicians.

President Barack Obama is expected to sign the bill shortly, wrapping up a legislative year marked by repeated partisan brinksmanship and declining public approval of a seemingly dysfunctional Congress.

Obama is also expected to sign a separate appropriations bill funding the government through September 2012, before heading off to Hawaii to join his family for the holiday break.

House and Senate members will resume negotiations on a year-long extension of the tax cut — along with a lengthier unemployment benefits extension and doc fix —

Political analysts believe that the showdown over the payroll tax cut has eroded GOP strength on the party’s core issue of lower taxes. While GOP leaders first questioned the merit of the tax holiday and then complained that a short-term extension would be more trouble than it’s worth, Obama used the standoff to portray the Republicans as defenders of the rich with a callous attitude toward the burdens of the middle class.

House Speaker John Boehner, R-Ohio, finally succumbed Thursday to calls from across the political spectrum for House Republicans to stop blocking congressional approval of the two-month extension, which had been previously approved by the Senate in overwhelming bipartisan fashion.

Boehner, in announcing the deal to reporters late Thursday, insisted the House GOP’s prior opposition to the Senate plan was the right thing to do, even if it turned out to be politically questionable.

“It may not have been politically the smartest thing in the world,” Boehner said, but the end result was “we were able to fix what came out of the Senate.”

The speaker also acknowledged the pressure he was under, saying: “I talked to enough members over the last 24 hours who say we don’t like the two-month extension and if you can get this fixed, why not do the right thing for the American people even if it’s not exactly what we want.”

Thursday’s agreement produced essentially the same proposal House Republicans rejected from the Senate earlier this week. House Republicans were given slim political cover through the addition of legislative language designed to ease the administrative burden on small businesses implementing the plan, as well as a commitment to continue negotiations on a one-year extension of the payroll tax cut and other benefits.

While the two-month extension was shorter than desired, Obama repeatedly urged congressional leaders over the past week to follow through on their stated intention to negotiate a one-year extension that all parties now publicly claim to favor.

Under the deal, the payroll tax will remain at the current 4.2% rate instead of reverting to the 6.2% rate it was at before the cut enacted last year. Without congressional action, the higher rate would have returned in 2012, meaning an average $1,000 tax increase for 160 million Americans. The typical worker’s take home salary would have been reduced by about $40 per pay period without the tax cut.

A tea party-led House GOP uprising last weekend caused Boehner to initially reject the Senate’s two-month plan, instead pushing for an immediate 12-month extension and setting up this week’s political showdown in the final days before the payroll tax cut was set to expire. Critics of the House GOP’s stance insisted that the Senate’s shorter extension was necessary to give negotiators more time to hammer out a deal over how to pay for the continuation.

By the time Thursday rolled around, however, the speaker was ready to raise the white flag of surrender. According to GOP sources, Boehner held a conference call Thursday afternoon with his fellow House Republicans in which the speaker refused to allow any members to ask questions or raise objections. One Republican House member on the call described Boehner as “tired and ticked off.”

Analysts said Boehner had little choice but to back down.

“It became increasingly obvious he had to fold,” said CNN Senior Political Analyst David Gergen, using poker terminology. Boehner was under “intense pressure from senior Republicans” over a situation that “became so botched,” he said.

Darrell West , the vice president and director of governance studies at the Brookings Institution, said the issue has worked in the favor of Democrats because they had Republicans “seemingly willing to accept a tax increase” by opposing the Senate extension of the payroll tax cut.

Boehner’s stance drew sharp criticism, including an editorial this week in the conservative Wall Street Journal that said House Republicans had lost the political advantage of advocating tax cuts to Obama and the Democrats.

On Thursday, Senate Republican leader Mitch McConnell, R-Kentucky, publicly called for Boehner to accept a short-term extension. Similar statements by other conservative Republicans showed the tide turning against the speaker and his GOP lieutenants.

Conservative Rep. Sean Duffy, R-Wisconsin, was among those adding his voice to GOP calls for House Republicans to relent in their standoff.

“While I would prefer a year-long tax holiday, I refuse to let anyone play games with my constituents who stand to face a significant tax hike if we don’t act,” Duffy said Thursday in a statement. “That’s why I will support any option to extend the payroll tax cut.”

A number of Republicans have said the party should have declared victory after winning an agreement by Obama — as part of the payroll tax cut package — to make a decision within the next 60 days on whether to proceed with the proposed Keystone XL oil pipeline from Canada to the Gulf of Mexico. Republicans and some Democratic union leaders say the controversial pipeline will create thousands of new jobs; critics question its environmental impact.

President Barack Obama is scheduled to appear with a group of middle class Americans later in the day as part of a White House attempt to illustrate the impact to be faced by 160 million American workers if the tax holiday expires on December 31. The typical worker’s take home salary will shrink by about $40 per pay period without the tax cut, or $1,000 annually.

For their part, Speaker John Boehner, R-Ohio, and other top House Republicans showed a unified front of defiance during an appearance before reporters on Capitol Hill Thursday morning. Pushed by his conservative, tea-party infused House GOP caucus, Boehner continued to insist that anything less than an immediate one-year extension of the cut will only create more economic instability and do little to generate job growth.

“The fact is we can do better,” Boehner said. “It’s time for us to sit down and have a serious negotiation and solve this problem.”

House Majority Leader Eric Cantor, R-Virginia, insisted that there’s “not a big difference” between competing plans to extend the tax cut.

“We want to solve the problem,” Cantor said. “We could probably resolve the differences within an hour.”

Democrats and Republicans now publicly agree on the need for a one-year extension, but critics of the House GOP’s stance have said a two-month extension is necessary to give negotiators more time to hammer out a deal over how to pay for the continuation. They accuse House Republicans of creating the very instability they have railed against and of needlessly creating yet another congressional crisis at the end of a year filled with Capitol Hill showdowns.

Also at stake: extended emergency federal unemployment benefits and the so-called “doc fix,” a delay in scheduled pay cuts to Medicare physicians.

Both of those measures, along with the tax holiday, are currently scheduled to expire in nine days.

Sen. John McCain of Arizona, the GOP’s 2008 presidential nominee, strongly criticized the House GOP’s stance during an appearance on CNN’s “American Morning” Thursday.

“The Republicans are losing this fight. We need to get back on track,” McCain said. “A thousand dollars a year is a big amount of money to most Americans, and I think it’s very important. … I worry about the fact that we are continuing to increase the debt and the deficit, but now it’s become very symbolic, and I think it has to be done.”

Illinois Sen. Dick Durbin, the number two Senate Democrat, told CNN House Republicans have completely isolated themselves politically.

They are “going down a track that even the most conservative publications and leaders in America rejected,” Durbin said. “I think that John Boehner should acknowledge the fact that he cannot leave three million people without extension of unemployment benefits, and 160 million people — middle income Americans — facing a tax increase because of Republican action.”

Despite mounting pressure on House Republicans to give in and pass the Senate’s short-term extension, a well-placed House GOP source indicated Wednesday that his side would not consider an end-game to the standoff until next week, just days before the December 31 deadline.

Numerous Senate Republicans have indicated they feel politically undercut by their House colleagues. On Saturday, the Senate voted 89-10 — with overwhelming GOP support — to approve two additional months for all three programs.

The House GOP caucus, however, revolted against that blueprint, calling it an inadequate patchwork plan. On Tuesday, the House voted 229-193 on a virtual party-line basis to express its disagreement with the Senate plan and call for the creation of a House-Senate conference committee to resolve the matter — something already ruled out by Senate Majority Leader Harry Reid, D-Nevada.

The $33 billion “bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on January 1,” Obama said after the House vote. “It’s the only one.”

The House also approved a separate resolution supporting a year-long extension of both the payroll tax cut and emergency unemployment benefits, along with a new, two-year doc fix. There is no indication, however, that congressional negotiators would be able to reach a bipartisan agreement by the end of the year.

Further complicating matters is the fact that the Senate has adjourned for the year. Most House members also left Washington after Tuesday’s vote.

Boehner released a public letter to Obama Tuesday urging him to order the Senate back from its holiday break to take part in further talks — a gesture immediately rejected by the White House.

In a symbolic move, Maryland Rep. Chris Van Hollen, a member of the Democratic leadership, walked onto the floor of a virtually empty House chamber Wednesday morning to call for the House to hold a direct, up-or-down vote on the bipartisan Senate plan. Boehner prevented a direct vote on the Senate bill Tuesday, signaling that House GOP leaders may lack enough Republican support to defeat it in the face of unrelenting pressure.

The Wall Street Journal — a critical sounding board for conservatives — blasted Boehner and his House GOP colleagues in an editorial Wednesday, arguing that they had “achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter.”

“At this stage, Republicans would do best to cut their losses and find a way to extend the payroll holiday quickly,” the paper’s editorial writers said. “Then go home and return in January with a united House-Senate strategy that forces Democrats to make specific policy choices that highlight the differences between the parties on spending, taxes and regulation. … The alternative is more chaotic retreat and the return of all-Democratic rule.”

“The House Republicans have painted themselves into a corner. They are on their own,” a Senate Republican leadership aide told CNN Wednesday. “This is a lose-lose situation for us. (House Republicans) let the Democrats get the messaging advantage and, more specifically, we’ve turned one of our key issues on its head. The Republicans look like they are the ones blocking tax relief.”

“When you are arguing process, you are losing, by definition,” the aide said. “We are arguing process while they’ve got politics on their side.”

A number of Republicans have said the party should have declared victory after winning an agreement by Obama — as part of the payroll tax cut package — to make a decision within the next 60 days on whether to proceed with the proposed Keystone XL oil pipeline from Canada to the Gulf of Mexico. Republicans and some Democratic union leaders say the controversial pipeline will create thousands of new jobs; critics question its environmental impact.

A failure to act could have major political fallout. Numerous observers believe Obama is preparing to parrot Harry Truman’s 1948 campaign next year by running against an unpopular, dysfunctional Congress controlled partly by the GOP.

After the Republican-controlled House passed a measure calling for more negotiations, Boehner made public a letter to Obama that urged him to order the Senate back from its holiday break to take part in further talks.

Leaders in the Democratic-controlled Senate reject that idea, and Obama agreed with them, telling reporters in a previously unscheduled appearance that the House must approve a two-month extension passed by an 89-10 vote in the Senate.

“The bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on January 1,” Obama said. “It’s the only one.”

The House motion, passed Tuesday with no Democratic support on a 229-193 vote, expressed the chamber’s disagreement with the Senate plan and called for the dispute to be immediately taken up by a House-Senate conference committee — something already ruled out by Senate Majority Leader Harry Reid, D-Nevada.

However, Boehner and the Republican leadership prevented a direct vote on the Senate’s two-month extension, signaling they may lack enough GOP support to defeat it in the face of unrelenting pressure from the White House, Democrats and some Senate Republicans.

Instead, the House approved a separate resolution supporting a yearlong extension of both the payroll tax cut and emergency federal unemployment benefits. House Republicans are also pushing for a new, two-year “doc fix,” or delay in significant scheduled pay cuts to Medicare physicians.

All three measures are set to expire December 31.

Meanwhile, House members headed out of town for their holiday break after legislative business ended Tuesday.

The Senate measure approved Saturday called for a two-month extension of the payroll tax cut, unemployment benefits and the “doc fix” spending. It was a fallback plan designed to give both sides more time to negotiate.

Now that short-term compromise has slammed into a conservative roadblock in the House, where rank-and-file Republicans are fuming over the two-month time period of the plan, among other things.

The lingering dispute is hurting his party, veteran Republican Sen. John McCain of Arizona told CNN, adding that the reality of the issue is that the payroll tax cut must be extended to help out Americans still struggling in the economic recovery.

“It is harming the Republican Party,” McCain said. “It is harming the view, if it’s possible any more, of the American people about Congress.”

As the clock ticks down, nobody appears willing to bend and neither side seems to know how to break the logjam. Boehner, R-Ohio, appointed House GOP negotiators for a conference committee, but Democrats say they have no plans to do the same.

According to House Republican sources, their strategy is to generate as much news coverage as possible of their appointed conferees in coming days to keep the pressure on Democrats to negotiate.

“We are going to try to remind people that we are still in town ready to work,” said one House GOP leadership aide.

One of the House negotiators, Rep. Fred Upton, R-Michigan, told CNN that he has already notified his wife that he will be in Washington for Christmas.

Boehner called for Obama to order the Senate to return from its holiday recess and appoint negotiators. The House already has come back from its holiday break to respond to the Senate’s two-month proposal.

In a letter to Obama made public by Boehner’s office, the speaker said, “I ask you to call on the Senate to return to appoint negotiators so that we can provide the American people the economic certainty they need.”

“Who doesn’t believe that if we don’t do this now that when we get to February 28th, guess where we’ll be? We’ll be right here doing the same thing that we are doing right now. I just think the American people expect us to do our work,” Boehner said during debate on the House floor.

White House spokesman Jay Carney told reporters Tuesday that the House needs to pass the Senate two-month extension so that a full one-year extension can be worked out.

“In order for it to get done, it has to pass the House,” Carney said, adding that Obama “cannot order the extension of the payroll tax cut. Congress has to take action.”

Obama then made his surprise appearance in the White House briefing room and called for Boehner to allow an up-or-down vote on the Senate proposal.

“House Republicans refuse to allow a vote,” Obama said, noting that Senate leaders from both parties had agreed to the short-term extension in order to guarantee that taxes don’t increase for working Americans while negotiations continue early next year on the one-year extension that House Republicans say they support.

“What they’re really holding out for is to wring concessions from Democrats on issues that have nothing to do with the payroll tax cut,” Obama said of House Republicans.

Neither Reid nor House Minority Leader Nancy Pelosi, D-California, would appoint Democratic negotiators for the conference committee proposed by House Republicans. Boehner named eight House Republicans as his representatives, but there was no word on Senate Republican conferees.

The mistrust between the parties was palpable. When asked if Democrats were to blame for the impasse by refusing to name conference committee negotiators, Pelosi said the issue was the refusal by House Republicans to go along with the bipartisan support for the Senate plan.

“Whatever they say is irrelevant,” Pelosi declared about Republican claims of wanting a one-year payroll tax cut extension. “What they do is what’s important, and what they’re doing is not giving a payroll tax cut to 160 million Americans.”

House Republicans, meanwhile, repeatedly suggested the 60-day extension in the Senate plan would be the limit of action on the issue if it passed, rejecting insistence by Obama and Reid that they wanted to continue working for a longer deal during the first two months of 2012.

“We’re going to drag them kicking and screaming to a conference,” said Rep. Andy Harris, R-Maryland.

A failure to act could have major economic and political fallout. The payroll tax break alone is worth roughly $1,000 a year for an average family and affects about 160 million Americans.

Numerous observers believe Obama is preparing to parrot Harry Truman’s 1948 campaign next year by running against an unpopular, dysfunctional Congress controlled partly by the GOP.

“This effort is more toward securing votes than toward securing economic growth,” said conservative Republican Rep. Jeff Flake of Arizona.

The House GOP leaders’ decision not to hold a direct up-or-down vote on the $33 billion Senate plan — an apparent reversal of earlier plans — came after a two-hour meeting of the entire House Republican caucus late Monday.

Pelosi told reporters that the change probably meant that Boehner and his lieutenants lacked enough support from their own members to guarantee a defeat for the Senate bill.

In the 434-member House chamber — one seat is currently vacant — the 242-seat Republican majority can only afford 26 defections to overcome a unified 192-seat Democratic minority.

A House GOP leadership aide conceded to CNN that it is a “cleaner message” to simply vote to affirm the House position on extending the payroll tax cut for a year, instead of opposing a two-month extension.

“We outright reject the attempt by the Senate to kick the can down for 60 days,” Cantor said after Monday night’s caucus meeting.

Carney emphasized that the bipartisan support in the Senate showed it was House Republicans in the minority on the issue, with the White House, Democrats and Senate Republicans all calling for the two-month extension.

Democratic legislators, meanwhile, said it was Republicans blocking progress in Congress. Senate Republicans objected to a floor vote on the House GOP payroll tax plan, while House Republicans now have prevented an up-or-down vote on the Senate measure that had broad GOP support, they said.

Boehner, however, said Monday night that “we disagreed with what the Senate produced.”

“They did their job,” he said of his call last week for the Senate to send the House a proposal. “They produced a bill, and the House disagreed with it.”

While there are sharp differences over how to proceed, both the House and Senate versions of the legislation extend the tax cut, unemployment benefits and the doc fix. Both measures also would push for presidential action on the proposed Keystone XL oil pipeline from Canada to the Gulf of Mexico — something demanded by Republicans.

Meanwhile, five mostly moderate Republican senators have called for the House to support the Senate’s two-month extension. The group consists of Sen. Scott Brown of Massachusetts, Sens. Olympia Snowe and Susan Collins of Maine, Sen. Richard Lugar of Indiana and Sen. Dean Heller of Nevada.

Brown issued a statement after Tuesday’s House vote that said House Republicans “would rather continue playing politics than find solutions.”

“Their actions will hurt American families and be detrimental to our fragile economy,” said Brown, who is facing a stiff re-election challenge in heavily Democratic Massachusetts next year. “We are Americans first; now is not the time for drawing lines in the sand.”

Meanwhile, five Democratic senators called on House Republicans to pass the Senate plan in order to speed up approval of the Keystone pipeline.

Boehner appears to have reversed himself since a conference call with caucus members Saturday, when he was the only House Republican leader to express support for the Senate plan, according to a GOP source.

The source said Boehner described the Senate vote as “a good deal” and “a victory” in the conference call. For his part, the speaker insisted Tuesday that he raised concerns about the Senate plan when he first heard of it.

“The rank-and-file members are extremely opposed” to the Senate plan, a GOP source stressed, adding that most members were concerned about the uncertainty caused by just a two-month extension, as well as the political benefit the White House could gain in the national dialogue over taxes.

The Senate’s two-month measure would reduce the deficit by nearly $3 billion, according to the Congressional Budget Office.

Under the plan, the $33 billion in costs would be offset by an increase in the fees that new homeowners with federally backed mortgages would pay to Fannie Mae, Freddie Mac and the Federal Housing Administration. Those entities would then turn that money over to the U.S. Treasury.

The bump would amount to about $15 per month for every $200,000 borrowed, Senate aides estimated.

Most senators agreed on a two-month extension as a fallback position after Democrats and Republicans were unable to reach a more long-term, comprehensive agreement.

The court announced Monday it will hear 5½ hours of arguments spread over three days March 26-28.

The Patient Protection and Affordable Care Act (PPACA or ACA) was signed into law March 23, 2010, passed by a Democratic congressional majority with the support of the president. It has about 2700 pages and contains 450 some provisions.

A ruling from the court is expected by late June and regardless of the outcome, will become a major issue in a presidential election year.

The largest and broadest legal challenge to the Patient Protection and Affordable Care Act comes from a joint filing by 26 states, led by Florida. It was that series of appeals the high court had accepted for review.

At issue is whether the “individual mandate” section — requiring nearly all Americans to buy health insurance by 2014 or face financial penalties — is an improper exercise of federal authority. The states also say that if that linchpin provision is unconstitutional, the entire law must be also go.

Joining Florida in the challenge are Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.

Four issues will be addressed by the Supreme Court:

Anti-Injunction Act

First, the court on March 26 will consider whether those challenging the law be barred from making any legal or constitutional claims until the individual mandate actually goes into effect in 2014.

The AIA — in place since the 19th century — bars claimants from asking for a refund on a tax until that tax has been collected and paid. Judges in two federal appeals courts have made that argument, which would effectively stop the current legal fight in its tracks. Citing that law might give the court a way out of deciding the explosive issue in an election year.

The majority could decide the political branches can best resolve the conflicts, at least for now, or that the matter can be handled after the November elections. Some court watchers have called this the health care “sleeper issue.” It could potentially delay a decision on the constitutionality of the individual mandate for at least four years.

Individual mandate

The court will hear two hours of arguments on this most key issue on March 27. This provision requires nearly all Americans to buy some form of health insurance beginning in 2014, or face financial penalties. May the federal government, under the Constitution’s Commerce Clause, regulate economic “inactivity”? Three federal appeals courts have found the PPACA to be constitutional, while another has said it is not, labeling it “breathtaking in its expansive scope.” That “circuit split” all but assured the Supreme Court would step in and decide the matter.

The Florida-led coalition of say individuals cannot be forced to buy insurance, a “product” they may neither want nor need. The Justice Department has countered that since every American will need medical care at some point in their lives, individuals do not “choose” to participate in the health care market. Federal officials cite 2008 figures of $43 billion in uncompensated costs from the millions of uninsured people who receive health services, costs that are shifted to insurance companies and passed on to consumers.

Severability

This is the “domino effect” issue, and the court will hear 90 minutes of argument on this aspect on March 28.

If the individual mandate section is ruled unconstitutional, must the entire law collapse as well? A federal judge in Florida had ruled as much in February: “Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.”

But a federal appeals court overruled on the severability question, while upholding the individual mandate’s unconstitutionality. Opponents of the law say the individual mandate is crucial to the overall law, since it is the main funding mechanism for the expansion of a range of other programs. This may be the one question on which the justices will ultimately agree in favor of the government.

Medicaid ‘coercion’

Can states be forced by the federal government to expand their share of Medicaid costs and administration, with the risk of losing that funding if they refuse? The court will devote an hour to that question on March 28.

The 28 GOP-led states say the new law’s significant expansion of the social safety net unconstitutionally “coerces” state governments. That program is administered by the states with a combination of federal and state money, currently requiring coverage only for poor children and their parents or caretakers, adults with disabilities, and poor individuals over age 65. The “coercion” issue was surprisingly added to the healthcare debate by the justices.

Both sides of the issue agree what the high court decides on this question could have monumental implications for the regulatory ability of the federal government to set long-term national policy goals in areas like the environment, education, and the workplace.

Some states have long complained their autonomy is being eroded by creeping federal intervention on spending matters. Article 1 of the Constitution gives Congress the power “lay and collect … taxes to pay the debts and provide for the common defense and general welfare of the United States” and to “regulate commerce… among the several states.” Such authority has long been broadly interpreted, including when imposing conditions on recipients, including individuals and states. No federal court has ever ruled states have been unlawfully coerced when they accept conditions or strings attached to federal funds. The Supreme Court in 1987 affirmed that congressional discretion.

The PPACA’s Medicaid changes — beginning in 2014 — would make millions of additional Americans eligible for benefits, by raising the income level they earn and still qualify. That would include all adults, up to 133% of the federal poverty line. The tricky question is that states are not forced to agree to the law’s incremental Medicaid increases, spread out over six years. But the states say abandoning their participation as a result would be a financial, social, and political catastrophe– one which they cannot realistically foresee. Their needy citizens rely on Medicaid, states argue, but the law’s expansion of the program could cripple state budgets, currently on average about 20-percent. That would threaten other state spending priorities.

So the long-standing fight over “federalism” and the leverage the national government wields over states may soon reach epic levels with a high court decision either strengthening — or limiting — congressional authority on this and potentially a host of other regulatory areas.

As the clock ticked down, nobody appeared willing to bend and neither side seemed to know how to break the logjam.

The Senate voted 89-10 in favor of a two-month tax-cut extension on Saturday, but that short-term compromise has slammed into a conservative roadblock in the House, where rank-and-file Republicans are fuming over the short-term nature of the plan, among other things.

A Republican-led congressional panel on Monday night rejected a Democratic motion to allow a full House vote on the Senate plan — a move top Democrats characterized as a sign of weakness on the part of House Speaker John Boehner, R-Ohio, and other House GOP leaders.

The House is instead holding votes Tuesday on a measure calling for the issue to be taken up by a House-Senate conference committee, as well as on a resolution supporting a year-long extension of both the payroll tax cut and emergency federal unemployment benefits.

House Republicans are also pushing for a new, two-year “doc fix,” or delay in significant scheduled pay cuts to Medicare physicians.

All three measures are currently set to expire December 31.

Democratic leadership aides in the Senate — which has already adjourned for the year — told CNN their side won’t take part in a conference committee until the Republicans agree to the two-month extension. Two GOP leadership aides said the House will go on break after Tuesday’s votes, and won’t return until there’s a conference committee deal.

The political consequences of a failure to act could have major economic and political consequences. The payroll tax break alone is worth roughly $1,000 a year for an average family and affects roughly 160 million Americans. Numerous observers believe President Barack Obama is preparing to parrot Harry Truman’s 1948 campaign next year by running against an unpopular, dysfunctional Congress controlled partly by the GOP.

House GOP leaders’ decision not to hold a vote on the $33 billion Senate plan — an apparent reversal of earlier plans — came after a two-hour meeting of the entire House Republican caucus late Monday.

House Minority Leader Nancy Pelosi, D-California, told reporters that the change probably meant Boehner and his lieutenants lacked enough support from their own members to defeat the Senate bill.

“My guess is that they are afraid that their members are not going to stick with them,” Pelosi said.

In the 434-member House chamber — one seat is currently vacant — the 242-seat Republican majority can only afford 26 defections to overcome a unified 192-seat Democratic minority.

South Carolina Rep. James Clyburn, part of the House Democratic leadership, said Monday night his party’s caucus was 99% in support of the Senate measure.

A House GOP leadership aide conceded to CNN that it is a “cleaner message” to simply vote to affirm the House position on extending the payroll tax cut for a year, instead of opposing a two-month extension.

Another GOP aide said Republicans now believe it makes more sense for them to have an “affirmative vote” instead of a “negative one.”

Earlier, House GOP leaders announced that votes on the issue would take place Tuesday instead of Monday night, as originally planned. Majority Whip Kevin McCarthy, R-California, told reporters that it was better to hold the votes “not in the dark of night but in the light of day.”

The political drama followed a day of escalating brinksmanship as legislators stepped up their game of chicken over the expiring payroll tax cut.

Democrats flatly rejected Boehner’s demand to ditch the two-month extension passed by the Senate last week in favor of an immediate one-year continuation. Boehner and other GOP leaders argue that the two-month proposal amounts to a short-term fix instead of resolving the issue to provide certainty to American taxpayers and businesses.

“We outright reject the attempt by the Senate to kick the can down for 60 days,” Majority Leader Eric Cantor, R-Virginia, said after Monday night’s caucus meeting.

Senate Majority Leader Harry Reid, D-Nevada, has said he has no intention of considering the new GOP plan. On Monday, he blasted Boehner for allegedly abandoning the Senate compromise.

“I negotiated a compromise (with Senate Minority Leader Mitch McConnell, R-Kentucky) at Speaker Boehner’s request. I will not reopen negotiations until the House follows through and passes this agreement that was negotiated by Republican leaders and supported by 90 percent of the Senate,” Reid said.

White House Press Secretary Jay Carney called Boehner’s stance “nonsensical,” stating that it “takes compromise to get something done” under divided government.

“Americans paying attention to this must be pulling their hair out,” Carney said.

Boehner, however, said Monday night that “we disagreed with what the Senate produced.”

“They did their job,” he said of his call last week for the Senate to send the House a proposal. “They produced a bill, and the House disagreed with it.”

While there are sharp differences over how to proceed, both the House and Senate versions of the legislation extend the tax cut, unemployment benefits and the doc fix. Both measures also would push for presidential action on the proposed Keystone XL oil pipeline from Canada to the Gulf of Mexico — something demanded by Republicans.

Among the obstacles facing a possible conference committee to hash out the differences: the Senate has already adjourned for the year and is on its holiday break. Also, Pelosi has said she has no intention of appointing members to a conference committee without getting an opportunity for a direct vote on the Senate proposal.

Both Pelosi and Reid have said such negotiations should happen when Congress returns from its holiday recess in January, after the Senate’s two-month payroll tax-cut extension has passed.

Rep. Steny Hoyer of Maryland, the No. 2 House Democrat, said Monday that the maneuvers by House Republicans show they never supported a payroll tax decrease in the first place.

On Monday, at least five mostly moderate Republican senators voiced disapproval with the possible defeat of the Senate plan, demonstrating increasing pressure on House Republicans to pass it.

The group included Massachusetts Sen. Scott Brown, Maine Sens. Olympia Snowe and Susan Collins, Indiana Sen. Richard Lugar and Nevada Sen. Dean Heller.

“During this time of divided government, both parties need to be reasonable and come to the negotiating table in good faith,” said Brown, who is facing a stiff re-election challenge in heavily Democratic Massachusetts next year. “We cannot allow rigid partisan ideology and unwillingness to compromise stand in the way of working together for the good of the American people.”

Meanwhile, five Democratic senators called on House Republicans to pass the Senate plan in order to speed up approval of the Keystone pipeline.

Congressional Democratic leaders insist the Republican-led House will be blamed for a year-end increase in working Americans’ tax bills if it fails to go along with the Senate.

“This is a pass-the-popcorn moment for Democrats,” one senior congressional Democratic leadership aide told CNN Monday. “Boehner has been hung out to dry by his caucus, and we are not going to save him.”

Boehner appears to have reversed himself since a conference call with caucus members Saturday, when he was the only House Republican leader to express support for the Senate plan, according to a GOP source.

The source said Boehner described the Senate vote as “a good deal” and “a victory” in the conference call. For his part, the speaker insisted Monday that he raised concerns about the Senate plan “from the moment I heard of it.”

Boehner said he only praised a provision in the Senate bill requiring presidential action on the Keystone pipeline.

“The rank-and-file members are extremely opposed” to the Senate plan, a GOP source stressed, adding that most members were concerned with the uncertainty caused by just a two-month extension, as well as the political benefit the White House could gain in the national dialogue over taxes.

The Senate’s two-month measure would reduce the deficit by nearly $3 billion, according to the Congressional Budget Office.

Under the plan, its $33 billion in costs would be offset by an increase in fees that new homeowners with federally backed mortgages will pay to Fannie Mae, Freddie Mac and the Federal Housing Administration. Those entities would then turn that money over to the U.S. Treasury.

The bump amounts to about $15 per month for every $200,000 borrowed, Senate aides estimated.

Most senators agreed on a two-month extension as a fallback position after Democrats and Republicans were unable to reach a more long term, comprehensive agreement