Senate Majority Leader Harry Reid plans to offer later Thursday legislation to extend expiring tax cuts, an aide said Thursday.
Reid, a Democrat, has said he would seek to make changes in the proposed compromise crafted by President Obama and congressional Republican leaders, the aide said.
The aide said that, at least for now, opposition by House Democrats to the president's plan will not delay Senate consideration.
Earlier Thursday, House Democrats rejected the Obama plan and are considering drafting a counterproposal, Democratic Representative Adam Schiff said on Thursday.
Schiff made the comment after a closed-door meeting of House Democrats where lawmakers, on a voice vote, agreed that the Obama measure should not come up for a vote in their chamber.
At the very least, Democrats agreed to seek changes in the plan, which they feel are too generous to wealthy Americans, Rep. Pete DeFazio said.
House Majority Leader Steny Hoyer was more resigned, saying congressional Democrats have no choice but to accept the tax package.
"We're going to have an increase in taxes on working Americans ... if we continue to have gridlock," said Hoyer, a Maryland Democrat.
He said that continuing to fight the deal because it includes cuts for the wealthy would put tax cuts for middle- and lower-income people at risk, and jeopardize unemployed workers who badly need jobless benefits.
Speaking Thursday at a White House promoting American exports, Obama said the vote will determine whether the economy "moves forward or backward."
The president again pressed Congress to pass the agreement, saying it has the potential to create millions of jobs. He said if it fails, Americans would see smaller paychecks and fewer jobs.
But Rep. Chris Van Hollen, D-Md., said "the jury is still out" on the measure's enactment because many Democrats are furious over an estate tax provision.
Obama agreed to exempt the first $5 million of a deceased person's estate, and to tax the rest at 35 percent. Congressional Democrats had expected a 45 percent tax rate on anything above $3.5 million. Without congressional action, the estate tax will revert to an even higher rate: 55 percent on estates valued above $1 million. That should have strengthened Obama's hand when negotiating with Republicans, Van Hollen said.
Still, many congressional Democrats were grudgingly edging closer to embracing Obama's tax cut compromises, which would let rich and poor Americans keep Bush-era tax cuts that were scheduled to expire this month. Even so, 54 House Democrats wrote a letter to House Speaker Nancy Pelosi saying they're opposing the deal.
Led by Rep. Peter Welch of Vermont, they said they were against "acceding to Republican demands to extend the Bush tax cuts to millionaires and billionaires."
"We're paying a king's ransom," Welch said in an interview. "We didn't need to and couldn't afford to."
The 54 Democrats, by themselves, would not be enough to block the package in the House, depending on how much support it gets from Republicans.
After Obama publicly defended the plan for a third day Wednesday, and Vice President Joe Biden met with Democratic lawmakers in the Capitol for a second day, several Democrats predicted the measure will pass, mainly because of extensive Republican support.
Rep. Barney Frank, D-Mass., predicted the tax cut compromise "will be passed by virtually all the Republicans and a minority of Democrats." He said he would vote against it.
Obama said more congressional Democrats would climb aboard as they studied details of the $900 billion year-end measure.
Raising the direst alarm yet, his administration warned fellow Democrats on Wednesday that if they defeat the plan, they could jolt the nation back into recession.
Larry Summers, Obama's chief economic adviser, told reporters that if the measure isn't passed soon, it will "materially increase the risk the economy would stall out and we would have a double-dip" recession. That put the White House in the unusual position of warning its own party's lawmakers they could be to blame for calamitous consequences if they go against the president.
With many House and Senate Republicans signaling their approval of the tax cut plan, the White House's comments were aimed mainly at House Democrats who feel Obama went too far in yielding to Republicans' demands for continued income tax cuts and lower estate taxes for the wealthy.
Obama says the compromise was necessary because Republicans were prepared to let everyone's taxes rise and to block the extension of unemployment benefits for jobless Americans if they didn't get much of what they wanted.
Economists say the recent recession officially ended in June 2009. But with unemployment at 9.8 percent, millions remain out of work or fearful of losing ground economically, and the notion of the nation falling back into a recession would strike many as chilling. It also could rattle markets and investors.
The deal Obama crafted with Senate Republican leaders would prevent the scheduled Dec. 31 expiration of all the Bush administration's tax cuts enacted in 2001 and 2003, even though Obama had often promised to end the cuts for the highest earners.
House Democrats, who will lose their majority in January, still hold a 255-179 edge in the current Congress. To pass a big bill with mostly Republican votes would mark a dramatic departure from recent battles, such as the health care overhaul, which was enacted with virtually no GOP support in either chamber.
Passage of Obama's plan seems more assured in the Senate, where numerous Democrats have agreed that the president had little choice in making the compromises with Republicans. Still, Majority Leader Harry Reid, D-Nev., said he and colleagues are considering possible changes, and action could come within days.
Hoyer made his remarks in an interview on MSNBC.