Democrats in the House of Representatives defied President Barack Obama on Thursday, rejecting a tax deal he struck with Republicans and complicating efforts to extend tax breaks that run out in three weeks.
House Democrats voted at a meeting in Congress against his proposal and called for changes to provisions that they say are too generous for the wealthiest 2 percent of Americans.
Speaker Nancy Pelosi, who has been a key ally of the White House, joined the rebellion against the tax plan, vowing to prevent the House from voting on it.
But there was still strong support in Congress for the proposal and time for lawmakers to negotiate a compromise.
Obama wants to extend all individual income tax cuts for two years, in addition to extending jobless benefits, enacting a payroll tax cut and other measures.
Economists say the deal could boost the sluggish economy at a time when Congress has no further appetite for spending-based stimulus efforts.
But Democrats say the deal is too generous to wealthier Americans.