Senate Republicans unveiled their alternative to a Democratic plan to continue the payroll tax cut, paying for it by means-testing federal benefits to prevent payouts to millionaires and billionaires.

Democrats proposed a 3.25 percent surtax on incomes over $1 million to pay for the extension, a move Republicans have pledged to oppose.

The GOP plan would also impose a three-year pay freeze for federal workers, and begin cutting the number of Americans employed by the government by 10 percent — or about 200,000 jobs.

Republicans are also introducing their version of the "Buffett Rule," which would make it easier for the wealthy to voluntarily contribute to paying down the federal deficit on their tax returns.

Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid rejected the Republican plan:

“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.”

Here's the full press release from Senate Republicans:

Republican Payroll Proposal

The Republican Proposal Extends Current Payroll Tax Relief, Reduces The Deficit By $111 Billion And Trims The Size Of The Federal Government

Prevents A Tax Increase, Protects Social Security:

Provides a one year extension of the temporary Social Security tax holiday that passed in 2010, protecting all individuals from tax increases, including the job creators targeted by the Democrat plan. Ensures that the Social Security Trust Fund is not harmed by this temporary tax holiday.

Reduces The Deficit, Trims The Size Of Government:

Reduces the deficit by $111 Billion. Uses The Simpson-Bowles model to freeze federal civilian salaries and reduce the size of the civilian federal work force.

Means Tests Government Benefits For Millionaires & Billionaires:

Adds a new means test to government health benefits, unemployment compensation and food stamps so that millionaires aren’t receiving federal benefits that are better targeted elsewhere.

President Obama: “I’ve said that means testing on Medicare… would be appropriate.” (President Obama, Press Conference, 7/15/11)

“I’ve said that means testing on Medicare… would be appropriate.” (President Obama, Press Conference, 7/15/11) Sen. Dianne Feinstein (D-CA): “If you don't need them, if you are millionaire, why should you have these benefits?” (Sen. Feinstein, Floor Remarks, 1/25/10)

“If you don't need them, if you are millionaire, why should you have these benefits?” (Sen. Feinstein, Floor Remarks, 1/25/10) Jack Welch, Former GE Chairman: CNBC, 10/7/11)

Gives Millionaires & Billionaires Another Opportunity To Help With The Deficit:

Includes Sen. John Thune’s ‘Buffet Rule Act of 2011,’ which makes it easy for millionaires like Warren Buffet who want to pay more taxes to reduce the federal deficit with a voluntary contribution via their tax returns.

Warren Buffet: “I think that people at the high end, people like myself, should be paying a lot more...” (ABC News’ “This Week,” 11/21/10)

No Tax Hike On Job Creators:

Does not include a single dollar of new taxes on job creators.