* Mitch McConnell and Senate Republicans offer their counterproposal on the payroll tax cut: They would pay for it with a wage freeze for Federal workers, means-testing for Medicare, and (this part is a gimmick) allowing the wealthy to contribute more in taxes if they so choose.

In other words, Republicans want to fund the payroll tax cut extension with spending cuts that would impact Federal workers and higher earning Medicare beneficaries, rather than a millionaire surtax.

In policy terms, Republicans are simply not willing to accept a millionaire surtax on any grounds. In political terms, one way to understand this is as an effort to shift the terms of the debate Dems successfully established: Either the super rich pay more, or workers and the middle class do; Republicans represent the former, and we represent the latter. GOP leaders are trying to shift the argument away from one pitting the one percent versus the 99 percent, away from a showdown over whether the wealthy should pay their fair share, and onto their own familiar turf, i.e., taxpayers versus government.

* A Harry Reid spokesman says the GOP proposal is a no-go, but seems to open the door to some kind of compromise:

“We are glad Republicans have seen the light and taken up Democrats’ call to pass a middle-class tax cut, just a few days after their leadership indicated they would oppose it. However, Democrats’ proposal would put more money in the pockets of middle class families and create more jobs. The Republican proposal cannot pass the Senate as it stands, but now that Republicans have reversed their position on this middle-class tax cut, we look forward to working with them to negotiate a consensus solution.”

Note the point that Republicans that have “reversed themselves,” laying the groundwork for getting the credit for bringing about the eventual extension, assuming it happens.

* Chris Van Hollen’s statement aggressively defends public employees, and keeps up the Dem case about fairness:

The Republican payroll tax proposal represents another cynical ploy to single out federal employees for unfair treatment. The financial collapse and weak economy were not caused by the men and women who serve the federal government, and they should not be forced to shoulder the entire burden of the cost of recovery.

* Obama’s speech in Scranton today hammering Republicans over the extension heavily emphasized the contrast between the two parties’ values and priorities, which will be central to the 2012 Dem message.

* Sam Stein unearths an important Mitt Romney quote from 2006 about the individual mandate:

“There are a lot of people who say, ‘you know Governor, I don’t like this idea that people are going to be required to buy insurance. This is America. They should be free.’ Well, they are going to get free health care if they don’t buy insurance. I don’t think it is appropriate to say individuals have a choice of saying I don’t want to buy insurance even though I can afford it and I want to make somebody else pay for it. That’s not American.”

Yup, for the 2006 Romney, the mandate was the “American” way to go. Now the mandate (on the federal level, at least) is unconstitutional.

* Dan Balz makes a heroic effort to parse Mitt Romney’s combined criticism of and agreement with Newt Gingrich’s humane opposition to mass deportation, including this nice line: “the more he tries to explain the difference, the less difference there seems to be.”

* Snark of the day, from John Podesta, on why Republicans won’t support a millionaire-funded payroll tax cut extension:

Congressional Republicans seem focused on two things to the near exclusion of everything else — helping the wealthiest 1 percent and hurting President Barack Obama. Not necessarily in that order.

* Are Dems drawing a hard line on unemployment benefits? They vow that Congress won’t adjourn for Christmas until the extension is passed, and say the issue is off the table for any horse trading.

* Occupy Wall Street is set to target a DCCC fundraiser, a reminder that the movement sees both parties as part of the problem. Footnote: Reublicans attacked the DCCC for voicing support for the protests.

* And I’ve been remiss in not covering the battle over the defense authorization bill and whether it could authorize the indefinite detention of American citizens. Adam Serwer brings us up to speed with a piece saying that it could.

What else is happening?