WASHINGTON (Reuters) - The U.S. Congress headed toward another showdown over the "fiscal cliff" on Tuesday as Republicans in the House of Representatives mounted a last-ditch effort to reshape a tax deal meant to prevent Washington from pushing the world's biggest economy into recession.

Speaker of the House John Boehner (R-OH) walks from a meeting with House Republicans about a solution for the "fiscal cliff" on Capitol Hill in Washington January 1, 2013. REUTERS/Joshua Roberts

If successful, the measure would set up a high-stakes showdown with the Democratic-controlled Senate and risk a stinging rebuke from financial markets about to open in Asia.

If it fails, lawmakers - including many Republicans - would likely back tax hikes for the wealthiest Americans and thus resolve a main chapter of the fiscal crisis that has consumed Washington for months.

One senior Republican suggested the House would ultimately approve a Senate bill that raises taxes, ending the current fiscal cliff crunch and giving President Barack Obama a victory, while easing worries in financial markets.

"We've gone as far as we can go and I think people are ready to bring it to a conclusion," Republican Representative Jack Kingston of Georgia said. "We fought the fight."

The measure being considered on Tuesday night by House Republicans would add $330 billion in spending cuts over 10 years to the Senate bill, which raises taxes on the wealthiest U.S. households by $620 billion over the same period.

But some House Republicans were worried that changing the Senate bill would only drag out the political drama.

And Senate Democrats say they will refuse to consider any changes to their bill, which passed 89 to 8 in a rare display of unity early Tuesday morning.

Lawmakers have struggled to find a way to head off across-the-board tax hikes and spending cuts that began to take effect at midnight, a legacy of earlier failed budget deals that is known as the fiscal cliff.

OVER THE CLIFF

Strictly speaking, the United States went over the cliff in the first minutes of the New Year because Congress failed to produce legislation to halt $600 billion of tax hikes and spending cuts set for 2013 that started kicking in on January 1.

But with financial markets and federal government offices closed for the New Year's Day holiday, lawmakers had a little more time to work out a compromise without real-world consequences.

House Speaker John Boehner has struggled over the past two years to control his members, and he might have difficulty rounding up the 217 votes needed for passage of the spending cuts.

Republican aides said if that happened they would then hold an up-or-down vote on the Senate's bill. With House Democrats largely behind the Senate measure, Boehner would then only need to find 40 or so votes from his side to send the measure on to Obama to sign into law.

Republican Representative Steve LaTourette of Ohio, a close ally of Boehner, suggested the speaker could find that much support among his own ranks.

Republicans could face a backlash if they scuttle the deal. Income tax rates rose back to 1990s levels for all Americans at midnight, and across-the-board spending cuts on defense and domestic programs would begin to kick in on Wednesday.

Economists say the combination of tax cuts and spending cuts could cause the economy to shrink, and public opinion polls show Republicans would shoulder the blame.

(Additional reporting by Rachelle Younglai and; David Lawder, Writing by Andy Sullivan; Editing by Alistair Bell and Eric Beech)

Related Stories:
U.S. Senate's "fiscal cliff" bill adds $4 trillion to deficits - CBO

• Malaysia tycoon Vincent Tan plans IPO of football club Cardiff City
• Google, like Facebook, in talks to buy Waze for about US$1bil
• Crown selling entire 10% in rival Echo, partly owned by Genting(Update)
• First edition of 'Great Gatsby' to be sold at auction, can fetch US$150,000
• Malaysia leads the way in Basel III debt
• Markets face rough summer ride as Fed pullback feared
• Wall Street sags, HP hits 52-week high
• Commodities trader sues BP, Shell others for alleged oil price fixing
• Billionaire Icahn seeks up to US$7bil for Dell bid
• Google faces new federal antitrust probe
• Goldman Sachs unveils checks on conflicts in bid to fix tarnished image
• Air Asia's Tony Fernandes to ‘fire up’ investors
• Maybank bullish on growth, to expand regionally under new leadership
• Khazanah appoints Nor Mohamed deputy chairman
• Lafarge Malayan Cement to finalise next expansion plans by August

• London's Heathrow airport closed after emergency landing
• Far East quake felt in Moscow, tsunami warning lifted
• Police make new arrests in London soldier killing
• Britain's press demands jailing of Islamist preacher
• Tsunami warning in Russia's Far East after 8.2 quake
• US bridge collapse sends cars, people into river
• Strong quake strikes off Tonga
• Jury fails to decide on US murderer death sentence
• One killed in Brazil giant fuel depot blaze

• Kingston leads, McIlroy in Wentworth woe
• LPGA plans 12-hole rounds in water-logged Bahamas
• Ryan Palmer sizzles with 62 to seize lead at Colonial
• Kelly overcomes scare to clinch title in KLGCC
• Time to make amends Garcia wants to meet Woods to defuse racist row
• American Johnson back to defend Colonial crown
• Rain dampens debut of LPGA Bahamas event
• Tianlang adds another US event to schedule
• Clock ticking for next golden generation
• Nadal wants to create history at Roland Garros
• Serena out to tame French Open demons
• Zheng Jie stuns Wozniacki in Brussels
• British Open: Ramy Ashour racks up 38th successive win
• Nicol David sails into quarter-finals of British Open in 35 minutes
• BAM must stop rewarding mediocrity or be doomed

• Please wait.

• Air Asia's Tony Fernandes to ‘fire up’ investors
• Singapore GDP growth surprises, beats economists’ forecast of contraction
• KL car number plates to bear ‘W1A’
• Tian, Tamrin and Haris released after remand denied (updated)
• Inventions a-plenty, but no real innovation
• Robber shot dead after attacking out-of-uniform cop with meat cleaver
• Malaysia leads the way in Basel III debt
• Three held over May 13 statements
• Fernandes does his first firing in Apprentice Asia
• Wall Street sags, HP hits 52-week high