Financial rating agency Moody's Investors Service is predicting a tough year for Rhode Island's cities and towns as the economic downturn continues to wallop the state.

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.

In a win for organized labor, the National Labor Relations Board on Wednesday approved sweeping new rules that would speed the pace of union elections, possibly making it easier for unions to gain members at companies that have long rebuffed them.

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.