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Harry Reid
Senate Majority Leader Harry Reid

President Obama, in his remarks today, noted the extraordinary reversal of Republicans that tax cuts have to be paid for and that they sure didn't have to be paid for when it was tax cuts for the rich. Nonetheless, he says that those cuts should be paid for in a responsible way.

To that end, Senate Majority Leader Harry Reid has prepared a payroll tax cut compromise.

Unlike last week’s $265-billion proposal that was rejected along party lines, the latest Democratic proposal would drop the idea of extending the tax break to employers, instead lowering to 3.1 percent the workers’ tax rate that is set to increase by 2 percentage points at year’s end unless Congress takes action.

Differing from their last plan, Democrats would pay for the costs by proposing cuts to non-health mandatory programs that were under consideration for reductions by the congressional supercommittee. And they will call for a temporary surtax on millionaires, rather than a permanent one, and will scale back the 3.25 percent surtax that was part of last week’s plan.

Democrats will also call for means testing for certain government benefits, like unemployment insurance and food stamps, to ensure affluent individuals no longer receive compensation from the government.

That last bit is rather meaningless. Stupid, meaningless, but is a sop to Republicans who seem to really think there are savings to be had by making sure millionaires aren't getting food stamps. Because that's the primary problem America is facing today. The new plan would scale back the already pretty insignificant (relative to income) millionaire's surtax from 3.25 percent to just under 2 percent. And it would make that tax hike temporary, sunsetting in 10 years.

For their part, in addition to means testing everything from food stamps and unemployment benefits to Medicare, the Republicans have a bunch of poison pills.

Republicans also want to lump in legislative riders, including completion of the controversial Keystone XL pipeline, and easing environmental regulations on boilers—both conservative favorites that face uphill battles in the Senate and with the administration.

Maybe they think by focusing on them, they can distract attention away from the fact that they've completely reversed course on whether tax cuts have to be paid for.

Originally posted to Joan McCarter on Mon Dec 05, 2011 at 11:21 AM PST.

Also republished by Daily Kos.

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