* Why Dems think they’re on offensive after payroll tax cut failure: Last night, Republicans in the Senate blocked Obama’s push to extend the payroll tax cut for well over one hundred million workers. They argued that the surtax on income over $1 million would hurt the economy by taxing jobs creators and small businesses.

This millionaire surtax would have affected only one percent of small businesses, according to the Treasury Department. It would have targeted around one in five-hundred American taxpayers, all of them wealthy, each of whom would have had to pay on average an additional 1/50th of their overall income in taxes, according to a Citizens for Tax Justice analysis.

The measure failed in the Senate, with 51 Senators voting for it, and 49 voting against it. You read that right: It failed even though a majority of the U.S. Senate supported it. While a handful of Dems did vote No, if Republicans would allow a straight up or down vote on the measure, the payroll tax cut would likely be extended for over 100 million workers.

None of the above is opinion; it’s all fact.

Jackie Calmes reports that Democrats think they have hit on a winning broader issue, and here’s the key insight about the politics of the situation:

Democrats have concluded from the payroll tax debate that Republicans are vulnerable over their opposition to any new taxes on the wealthy in a way they were not when Democrats proposed such taxes for deficit reduction. So they have reprised an old message — that Democrats fight for the middle class, Republicans for the rich — and are likely to sound it through 2012, in hopes of blunting the headwinds they face as unemployment remains high.

Dems erred by acquiescing to the GOP’s focus on the deficit, but now Dems think the battle has finally shifted on to turf favorable to them. Dems believe the public’s rising concern about inequality has created an environment in which their class-based argument will have newfound resonance. As Chuck Schumer said recently, Dems think this rising anxiety is rooted in a fundamental shift in the public’s perceptions of the economy: That the bottom has fallen out from under the middle class because the old rules — work hard, and you’ll get ahead — are no longer operative for anyone but those at the very top.

Dems intend to relentlessly frame their message around this idea: They want government to act to restore the middle class’s security and future, while Republicans are implacably and ideologically hostile towards any such government action, particularly if it means the wealthy have to sacrifice anything in the process. Dems are gambling that the public’s grasp of this basic difference in priorities between the parties will overcome the GOP’s argument that Obama’s economic policies have failed and continuing public unhappiness with Obama over chronic economic suffering.

* Obama hits Republicans for protecting the rich: Obama’s statement on the vote leaves little doubt that drawing a sharp contrast between the parties’ priorities in stark class-based terms will be central in 2012.

“Tonight, Senate Republicans chose to raise taxes on nearly 160 million hardworking Americans because they refused to ask a few hundred thousand millionaires and billionaires to pay their fair share,” the statement said. “Now is not the time to put the economy and the security of the middle class at risk.”

The reference to middle class “security” will be central to the Dem message, and is an effort to speak directly to the public’s shifting perceptions of the economy outlined above.

* Majority of Republicans reject GOP payroll tax proposal: More GOP Senators voted against the GOP’s proposed extension than in favor of it, even though it would have been paid for by a freeze on Federal salaries and means testing of Medicare:

The vote suggests that rank-and-file Republicans remain divided on the merits of keeping the tax cut, leaving their party vulnerable to criticism from Democrats that they would raise taxes on the middle class as Americans are struggling economically.

* What’s next in payroll tax cut fight? The Hill notes that House GOP leaders will now work to persuade their rank and file that they should support an extension of both the payroll tax cut and unemployment insurance, and will suggest new ways to pay for it.

Key quote from John Boehner: “I don’t think there’s any question that the payroll tax relief, in fact, helps the economy. You’re allowing more Americans, frankly, every working American, to keep more of their money in their pocket. Frankly, that’s a good thing.”

* A difficult time for GOP leaders? Also in the above link, the Hill observes that this is “an intensely difficult time for GOP leaders, who have implored their caucuses to fall into line even as Obama and Democrats have moved to steal their tax-cutting credentials.”

* New ad hits Romney as “Mr. One percent”: In an interesting move, MoveOn is going up with a new ad in Iowa hitting Mitt Romney in stark populist terms. It cites everything from his venture capitalist past to his enormous beach house to the New Hampshire Union Leader publisher’s claim that Romney is the candidate of the one percent:

The ad is all about chipping away at Romney’s “electability” argument. The idea is to highlight the inevitable Dem attack against Romney in hopes of persuading GOP voters of his vulnerabilities in a general election.

* Obama allies open new front against Romney: Relatedly, the Obama-allied American Bridge is out with a new memo and video detailing another aspect of Romney’s past: That he’s actually been a politcian for quite a long time. Obama allies don’t want Romney to define himself on his own terms as someone who can bring a private sector outsider’s perspective to fixing government and the economy.

The level of attention to Romney from the liberal/Dem infrastructure, even before GOP voting has started, is remarkable, and suggests Romney is the number one threat and probable nominee.

* Mitt Romney’s problem, in a nutshell: Why can’t Romney break out? Nate Silver digs into the numbers and sums up the problem: He isn’t well liked enough by moderates in his own party for it to offset his problems among conservatives.

* Why conservatives might forgive Newt’s vulnerabilities: Charles Krauthammer explains why conservatives might ultimately forgive Newt Gingrich despite his flip flops, history of affairs, and undisciplined ego:

What distinguishes Gingrich from Romney — and mitigates these heresies in the eyes of conservatives — is that he authored a historic conservative triumph: the 1994 Republican takeover of the House after 40 years of Democratic control. Which means that Gingrich’s apostasies are seen as deviations from his conservative core — while Romney’s flip-flops are seen as deviations from ... nothing.

It seems to me that the key difference here is that many conservatives have already accepted Newt as a flawed figure who has publicly atoned for his sins and is basically one of them, while they see Romney as someone who has not been forthright about his own failings and isn’t one of them at all.

* Big debate test looming for Gingrich: At the December 10th debate in Des Moines, frontrunner Newt is likely to come under the most intense fire he has sustained yet, and how he handles it will be critical to whether he can remain on top.

* Big debate test looming for Romney: William Jacobson on what conservatives will be demanding to see from Romney at that debate: “If Romney does not effectively confront Newt on stage in Iowa at the debates later this month, Romney will be Tim Pawlenty and the entire nation will know it.”

* Takedown of the day: Jonathan Capehart disembowles Newt Gingrich’s represhensible quote about “really poor children in really poor neighborhoods” who “have nobody around them who works.”

Atrios adds: “We all know who lives in `really poor neighbhoods.’” Indeed.

* And an apt summary of Romney’s disastrous Fox interview: Marc Ambinder boils down the Dem characterization of Romney: “The whiny rich corporate boss with a temper.”