The payroll tax-cut showdown in Congress could put the squeeze on working Americans and challenge the country's financial recovery, President Barack Obama's top economic consultant said Wednesday in Charlotte.

Employees have paid a 4.2 percent Social Security tax this year, a 2 percent cut. "Those measures have helped the economy expand during the past year," said Alan Krueger, chairman of the President's Council of Economic Advisers. "However ... (that) now faces an uncertain future in the House of Representatives."

The House and Senate are gridlocked over a plan to extend the current tax rate. It's scheduled to go up to 6.2 percent on Jan. 1, unless there's an extension.

The House rejected a Senate plan earlier this week to extend the current rate for two months. House Republicans want to negotiate a one-year extension. Lawmakers set up a joint committee to come up with a plan.

Krueger, in town addressing the World Affairs Council of Charlotte and introduced by Sen. Kay Hagan, D-N.C., said the payroll tax cut helped 160 million Americans, including 5 million in North Carolina. Typical families - still paying down debt and limiting their purchases - benefited by seeing about $1,000 in tax savings, he said.

Despite the challenges Krueger described caused by the payroll tax gridlock, he took the bright side toward interpreting the U.S. economy in his first address as chairman. Krueger said the country still possesses several traits that will ensure its economic stability in the long run.

Among them: a skilled workforce, ingenuity of its entrepreneurs and a diversity of industries. Those and other factors will help move the country toward fiscal sustainability, he said.

The American marketplace also thrives on competition, Krueger said - making businesses more productive and the U.S. more competitive in the global workplace. Competition gives workers a chance to change jobs, he said, which makes employers better.

Regarding the country's financial sector, Krueger said while some regulatory institutions failed the country in the housing bust, the country still has a strong economic foundation capable of adapting to changing times.

He said the U.S. leads the way in safeguarding banking customers, protecting patents by innovators, and promoting competition - all of which strengthen the country's financial base.

"Faith in our ... financial institutions is a key reason why the U.S. is a safe haven," Krueger said. "The U.S. will continue to play this role in the future."