House Republicans and Senate Democrats are set next week to advance their own packages extending a payroll-tax break for employees and a federal unemployment insurance program after the Senate on Thursday failed to work out dueling partisan proposals on the payroll tax.

The packages expected to advance in the House and Senate will likely also include a “doc fix” preventing physicians who accept Medicare from facing a 27 percent pay cut.

Congress appears poised to negotiate through competing legislation, leadership aides in both chambers said. Lawmakers took a similar approach this year before agreeing to raise the federal debt ceiling and to pass a continuing resolution extending federal funding. Because House Republicans can more easily move legislation than Senate Democrats, both sides expect the House measure to mostly set the template for a final deal.

The House GOP plan, negotiated by leadership, is expected early next week. Aides said it will likely include a one-year extension of the current payroll-tax rate, and a continuation of unemployment benefits. The doc-fix will be short-term, possibly lasting less than a year, aides said.

The parties differ over the length of an unemployment-aid extension and whether to extend the payroll-tax rate for employees at 4.2 percent or cut it further. But the main issue the parties must resolve is how to pay for the package.

A Democratic plan that was expected to be defeated on Thursday night would have imposed a surtax on those with annual income of $1 million or more. Democrats were set to vote down a Senate GOP proposal that funded an extension of the current rate with a reduction in the federal workforce, an extension of a pay freeze for federal workers, and a restriction on federal benefits for people who earn $1 million or more a year.

House GOP aides said they were likely to use some or all of those provisions, which were suggested last year by the Simpson-Bowles deficit-reduction commission, to fund their package.

Democratic aides said such a bill would likely be defeated in the Senate, though the federal pay freeze or the means test on millionaires might be accepted in a final package.

In a Statement of Administration Policy on Thursday in response to the Senate GOP payroll bill, the White House indicated it would oppose a payroll bill that adds “new cuts on top of the $1 trillion in reductions to defense and non-defense spending under the Budget Control Act and the additional $1.2 trillion in cuts that could automatically go into place because of the [super committee] failure.”

Failure of dueling Senate bills kick-started efforts to shape a compromise. Senate aides said talks between House and Senate leaders will likely also involve an omnibus appropriations bill or a continuing resolution that must be passed by Dec. 16. An agreement by Republicans to increase disaster aid in an omnibus, for example, could be traded for Democratic agreement to reduce the number of weeks unemployment benefits are extended.

Democrats also expect House Republicans to include conservative-themed policy riders in a funding bill. The riders can then be removed in exchange for Democratic concessions.

Members of the Senate Finance Committee, which has jurisdiction over most of the year-end issues beyond appropriations, met on Thursday to strategize over finishing legislative business both this year and next, Finance Chairman Max Baucus, D-Mont., said. Members called the meeting productive but inconclusive.

“It was essentially just a call to arms,” Baucus said. “It was very positive and constructive.”

Lawmakers remained stuck over how to pay for any eventual tax package. Sen. Jeff Bingaman, D-N.M., said funding offsets remained a sticking point but that there are several other issues standing in the way.

Baucus has also been meeting with House Ways and Means Chairman Dave Camp, R-Mich., on unemployment benefits.