President Obama and Senate Democratic leaders, meeting Wednesday at the White House, are considering dropping the millionaire surtax to pay for a payroll tax extension.
Senate Majority Leader Harry Reid and Democratic Policy Committee Chairman Chuck Schumer headed to the White House around 2:15 p.m. ET. A Senate Democratic aide told Fox the lawmakers are meeting with the president and are seriously considering axing the millionaire surtax.
Republicans have opposed paying for the payroll tax extension with a millionaire surtax, and now Democrats are looking at a provision in House Speaker John Boehner's bill instead.
Boehner's legislation, passed by the House on Tuesday, would keep 160 million workers from seeing their payroll tax jump on Jan. 1 from this year's 4.2 percent back to its normal level of 6.2 percent -- a $1,000 difference for a family making $50,000.
It would also renew expiring extra benefits for long-term jobless people and head off a cut in doctors' Medicare reimbursements, a reduction that could prompt some to stop seeing elderly patients who use that program.
But it has drawn nearly universal Democratic opposition because it would also force work to begin on the 1,700-mile-long Keystone XL oil pipeline, which Obama would rather postpone. It would also trim federal spending without forcing the wealthy to contribute as much as Democrats said they wanted.
Earlier Wednesday, the Senate floor resembled Wimbledon's Center Court, as Reid and Minority Leader Mitch McConnell lobbed accusations at each other.
Reid tried to get a vote for the House's bill to extend Social Security payroll tax cut -- a bill he has said would not pass the Senate
"The sooner we put this useless partisan charade behind us, the sooner we can negotiate a true bipartisan solution that protects middle-class workers" from a payroll tax increase, said Reid, D-Nev.
But McConnell returned volley, insisting on a vote on the "megabus" funding measure to stave off a government shutdown at week's end.
Then Reid tried to get Republican consent to take up any short-term stopgap spending measures the House might approve, but McConnell objected and scolded Reid for "wasting time."
Senate Republicans said they will not consent to a vote until they see Reid's alternative and vote on a government spending bill.
"Not until after they prevent a government shutdown," a senior GOP leadership aide told Fox News. The payroll tax cut "expires next year; troop funding runs out on Friday."
Bipartisan lawmakers have reached agreement on a $1 trillion measure financing scores of government agencies through next September, a bill that would avert a federal shutdown this weekend when temporary funding expires. But the White House has requested it be held until the payroll tax deal is done, for fear that House lawmakers will bolt town for the holidays before approving a different compromise on the tax cut.
Obama has vowed to veto the House payroll tax bill even though White House Communications Director Dan Pfeiffer said in a tweet Wednesday that the bill "simply shortens the review process in a way that virtually guarantees that the (Keystone) pipeline will NOT be approved."
Boehner's office said in an email that the Republicans are "on offense" because the House has passed a payroll tax bill and has "the moral high ground."
As a government shutdown looms, Boehner's office said, "It's crystal clear" that the Democrats are threatening to hold funding hostage.
Rep. Kevin McCarthy, R-Calif. said the House GOP was not trying to circumvent Reid by pushing its legislation.
"I'm not saying we outflanked (Reid), we just followed the Constitution," McCarthy said.
He also said the Keystone XL decision is too important to wait.
"Stop playing politics," McCarthy said. "Make a decision ... one way or another. America can't wait for job creation."
The Associated Press contributed to this report.