Wall Street Journal (01/17/12) Bendavid, Naftali

As members of Congress return to Washington this week, they must immediately delve back into the fight over the payroll-tax cut. Congress has until Feb. 29 to extend the popular tax break, which lowers workers’ payroll taxes to 4.2% from 6.2%, as well as a program to extend unemployment benefits.

To pay for the extension, Democrats had proposed a surtax on millionaires, while Republicans wanted to slash the federal work force by attrition. The battle lines appear to have hardened, as Democrats believe they have the political edge and see little reason to compromise, while House Republicans are angry about the latest outcome and are determined not to back down.