Members of the House-Senate committee say talks have stalled on reaching a deal to extend the payroll tax cut. Our Erin Billups has the latest.

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WASHINGTON, D.C. -- Members of the House-Senate committee charged with reaching a bi-partisan deal to extend the payroll tax cut, unemployment insurance and certain Medicare payments for doctors, say talks have stalled. One republican conferee even saying he'd be willing to drop the unemployment insurance extension.

"I'm willing to let unemployment expire. Go back to 26 weeks at this point and time, because protecting the payroll tax rate and protecting Social Security has to be the priority," New York Representative Tom Reed said.

Negotiations began falling apart after Senate democrats submitted their unemployment insurance plan to the committee Wednesday night, rejecting key republican proposals like requiring recipients get a GED and drug screenings.

Reed said, “Senate democrats believe that unemployment is really a handout program. We've taken the position that unemployment should be a hand-up program."

Reed says Democrats also rejected the GOP's pay-fors which include a year-long salary freeze for federal employees and higher premiums for wealthy Medicare participants. Democrats maintain that the $160 billion bill should be paid for by repealing the Bush tax cuts for the rich, which they argue increased the deficit.

"I'm for paying for it as the gentleman well knows by a surtax on those who have done the best," said House Minority Whip Steny Hoyer.

"It should come from a place that does not harm the middle class," House Minority leader Nancy Pelosi said.

Republicans and democrats accuse each other of stalling, finger pointing that echoes the fight that nearly killed the deal in December.

"There's been no willingness on the part of Leader Reid and his conferees to even offer a suggestion as to how to resolve this impasse," House Majority Leader Eric Cantor said.
Hoyer said, "They don't really think, as seemed to be reflected in the last year, that this payroll taxes cut ought to be extended."

The committee is still hoping to reach a deal by the 17th. The current extensions expire at the end of the month.