Seeking to break a stalemate that is threatening 160 million workers with Jan. 1 tax increases, President Barack Obama urged the top leaders of Congress Wednesday to first pass a short-term extension while promising to work with lawmakers on a full-year measure.

House and Senate leaders traded demands Wednesday but remained mired in a bitter holiday-season stalemate that is threatening 160 million workers with Jan. 1 tax increases and millions of the long-term unemployed with an end to their benefits.

The House Tuesday rejected legislation to extend a payroll tax cut and jobless benefits for two months, drawing a swift rebuke from President Barack Obama that Republicans were threatening higher taxes on 160 million workers on Jan. 1.

With neither side showing signs of yielding, a bitterly divided House debated a Republican effort Tuesday to force the Senate to negotiate a payroll tax cut and jobless benefits that expire on New Year's Day.

House Republicans will stick to their insistence that a bill extending a payroll tax cut and jobless benefits include language speeding work on a controversial oil pipeline, Speaker John Boehner said Friday.

Bipartisan agreement is near on a massive $1 trillion-plus year-end spending package and should be reached in time avert a possible government shutdown this weekend, lawmakers said Thursday.

President Barack Obama's Democratic allies in the Senate are using a critical year-end spending bill as political leverage to try to force Republicans to negotiate bipartisan legislation to extend payroll tax cuts and unemployment benefits due to expire at the end of the year.

Democratic officials say a new payroll tax cut plan by Senate Democrats drops President Barack Obama's proposal to award the tax cut to employers in addition to every worker who draws a paycheck.