In what would be a major concession, President Obama and Senate Democrats will drop their insistence that a surtax on millionaires pay for extending the payroll tax cut, a Democratic source tells CNN. This would be part of a new Democratic offer.

So much for a really good talking point for Democrats in 2012.

Like that's going to make the Republicans drop all of the bullshit, harmful provisions in their bill.

TPM reported that these discussions were happening.

Senate Democrats are now considering dropping their demand that a payroll tax holiday for workers be offset by imposing a small surtax on millionaires, according to Democratic aides — resigning themselves to the fact that Republicans won’t lift their filibuster if the surtax stands. That’d leave a substantial funding hole in the bill, and it’s unclear what would fill it. One option being considered is having mortgage giants Fannie Mae and Freddie Mac charge lenders higher fees — a version of this measure is already in the House-passed payroll tax cut bill.

How about this: drop the pay-for in the bill altogether. Tax cuts for millionaires sure as hell didn't have to be paid for. So why should tax cuts for working families? Forget all those offsets that will end up hurting middle America anyway, and just extend the damned things.