Dems Drop Millionaire Surtax Proposal

WASHINGTON (AP) – Democrats are abandoning their demand for a surtax on millionaires to help finance payroll tax cuts in a sign that lawmakers are trying to broker a compromise on Congress’ highest-profile year-end dispute.

Even so, there is no clear path to quick bipartisan agreement on the legislation, which would prevent an automatic Social Security tax increase on 160 million workers and the expiration of jobless benefits for people out of work the longest. Both would occur Jan. 1 without congressional action.

Lawmakers are also embroiled in a squabble over a huge, separate spending bill, a dispute that would force a shutdown of most of the government on Saturday unless it is resolved. Neither party wants to risk the wrath of voters by shuttering government doors.

Republicans say they plan to try winning House approval for a $1 trillion measure financing dozens of agencies through next September.

But that means a conflict with the White House, whose communications director, Dan Pfeiffer, said President Barack Obama had problems with some social, environmental and other provisions in the legislation. Pfeiffer said Congress should approve a short-term bill to keep the government open while final disputes are resolved.

House Republicans officially unveiled the massive, bipartisan spending bill late Wednesday to fulfill transparency rules, but Senate Democrats had yet to officially sign on. However, the measure wasn’t expected to change much, if at all, before a vote Friday, despite White House protests and an explicit veto threat regarding provisions placing limits on the ability of Cuban immigrants to visit families on the island or send money back to them.

The pre-Christmas wrangling caps a contentious year in a capital hindered by divided government, with Democrats controlling the White House and Senate while Republicans run the House. Lawmakers have engaged in down-to-the-wire drama even when performing the most mundane acts of governing, such as keeping agencies functioning and extending federal borrowing authority, tasks that are only becoming more politically delicate as the calendar nears the 2012 election year.

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