Democrats drop surtax on millionaires

By: Times-Dispatch Staff | The Associated Press
Published: December 15, 2011

WASHINGTON --

Democrats backed away from their demand for higher taxes on millionaires as part of legislation to extend Social Security tax cuts for most Americans on Wednesday as Congress struggled to clear critical year-end bills without triggering a partial government shutdown.

Republicans, too, signaled an eagerness to avoid gridlock and adjourn for the holidays. With a bipartisan $1 trillion funding bill blocked at the last minute by Democrats, GOP lawmakers and aides floated the possibility of a backup measure to run the government for as long as two months after the money runs out Friday at midnight.

With time beginning to run short, Senate Majority Leader Harry Reid, D-Nev., met with President Barack Obama at the White House, then returned to the Capitol and sat down with the two top Republicans in Congress, House Speaker John Boehner of Ohio and Sen. Mitch McConnell of Kentucky.

Taken together, the developments signaled the endgame for a year of divided government — with a tea party-flavored majority in the House and Obama's allies in the Senate — that has veered from near-catastrophe to last-minute compromise repeatedly since January.

At issue now are three year-end bills that Obama and leaders in Congress say they want:

One would extend expiring Social Security payroll tax cuts and benefits for the long-term unemployed, provisions at the heart of Obama's jobs program.

Another is the $1 trillion spending measure that would lock in cuts that Republicans won earlier in the year.

The third measure is a $662 billion defense bill setting policy for military personnel, weapons systems and the wars in Iraq and Afghanistan, plus national security programs in the Energy Department.

The White House said Obama would sign the measure despite initial concern over a provision requiring military custody of certain terror suspects linked to al-Qaida or its affiliates. U.S. citizens would be exempt.

The measure cleared the House, 283-136, with a final vote expected today in the Senate.