* Romney favors payroll tax cut extension, but how would he pay for it? Mitt Romney made some news last night by coming out for the payroll tax cut extension after deriding it as a Band-Aid solution, but what no one seems to have asked him is how he would fund it.

Spokesperson Andrea Saul tells me Romney does not support the Dem proposal of funding the extension with a small surtax on millionaires; she didn’t say whether he supports the GOP’s specific proposal of funding it with a freeze on Federal workers and means testing Medicare.

“Mitt Romney opposes any tax increase,” Saul emails. “He has already laid out a detailed fiscal plan for how he would reduce spending.” It seems like a good idea to nail down how — or whether — Romney thinks we should pay for the extension, since this question is at the center of our political debate right now.

* New bipartisan payroll tax cut proposal spares the “job creators”: This is going to get interesting: With Republicans opposing any millionaire surtax to pay for the payroll tax cut extension on the grounds that it will harm “job creators,” two Senators are set to introduce a proposal today that would tax millionaires while taking care to avoid any impact on said job creators.

Senators Claire McCaskill and Susan Collins are proposing to pay for the extension with a two percent surtax on income over $1 million, but with a “carve out” that would exempt people who pay their business tax through individual income tax returns, Collins spokesman Kevin Kelley says.

Additionally, the plan would have a jobs-creation component in the form of additional infrastructure spending, something that multiple Senate Republicans have previously said is a valid tool for jump starting the economy. How will Senate Republicans receive this, now that their concerns about job creators have been directly addressed?

* Public supports payroll tax cut, including Republicans: A new National Journal poll finds solid majority support for extending the payroll tax cut, with 58 percent of Americans in favor. Even half of Republicans favor extending it.

Footnote: These findings came after respondents were read the competing arguments about the extension, including the GOP claim that it won’t do much to hep the economy.

* AFL-CIO launches pressure campaign on unemployment: Chronic unemployment takes a far more severe human toll and has far broader and deeper societal impact than mere numbers suggest. Today the AFL-CIO is launching a new interactive Web site designed to pressure Congress to extend unemployment insurance, a place where current and former unemployed people can share personal stories that will help put human faces on the jobs crisis.

“We never forget that the unemployed are real people who face the prospect of going hungry and getting thrown out of their homes soon after the holidays if Congress fails to act,” AFL-CIO spokesman Josh Goldstein says.

* Plot thickens in tale of Romney and his records: Reuters has the scoop of the morning:

Mitt Romney spent nearly $100,000 in state funds to replace computers in his office at the end of his term as governor of Massachusetts in 2007 as part of an unprecedented effort to keep his records secret, Reuters has learned.

With Romney’s rivals seemingly unable or unwilling to go on offense over this kind of thing, it will likely be left to Dems to give this one legs.

* Newt-mentum in Iowa!!! Tons of Newt-mentum everywhere today. There’s the new Washington Post/ABC News poll finding that Newt Gingrich is well ahead of Romney among likely Iowa caucus-goers, 33-18. And Romney’s electability argument is a flop:

On the basic test of electability, 29 percent of likely caucus-goers say Gingrich represents the Republicans’ best chance to defeat President Obama in 2012, while 24 percent say so of Romney.

And for good measure, a new New York Times/CBS poll finds that Gingrich edges Romney on the electability question, 31-29.

* Newt-mentum in South Carolina!!! A new Winthrop University poll finds Newt beating Romney by double digits in South Carolina, 38-22. Chuck Todd comments: “Remember, the winner of the SC GOP primary has won the nomination every time since 1980.”

* What can Romney do about Newt? Amy Walters has a simple, user-friendly guide to Romney’s four options to deal with the surging Newt. One interesting thing to watch for: Whether Romney will leave the dirty work to his “super PAC,” so he doesn’t get tagged for going negative.

* Dems again hit Romney for flip-flopping: The DNC is out with still another Web video tagging Mitt Romney for a flip flop, this time on the payroll tax cut. In this case, Romney ended up supporting the extension after previously deriding it, and then claiming he doesn’t favor raising taxes on anyone, without saying unequivocally that he favored extending the payroll tax cut. Now he’s said it.

* Romney, Newt out of step with Congressional Republicans: Steve Benen notes that Gingrich, too, has endorsed extending the payroll tax cut, and observes: “Congressional Republicans balking at the tax cut are now even further to the right than both of their own party’s leading presidential candidates.”

This is confirmation, I think, that Romney and Gingrich know that opposing the extension is poison in a general election.

* Another reason for GOPers to oppose extending payroll tax cut: With some Republicans saying they’re worried about the extension’s impact on Social Security, Joan McCarter sees a “diversionary tactic so people stop talking about their opposition to a miniscule tax increase on the wealthy.”

* Obama far more resilient than expected: Michael Gerson is just wrong about the Dems’ new populism being a “base” strategy — right or wrong, Obama advisers think showing some fight is the best way to win back independents, too. But his column today is worth reading, as it captures exactly why smart Republicans are anything but sanguine about defeating Obama.

* And no, government regulations are not smothering economy: David Brooks goes about it gently, but this morning he basically tells government-hating GOP colleagues who are robotically repeating the claim that regulations are killing jobs that they’re full of it.

What else is happening?