On Thursday, the U.S. Senate passed legislation granting incentives to employers who hire veterans.

Congress has shown signs that it's interested in making a deal on taxes.

It won't get the debt problem solved, nor will it rollback cuts in the defense budget, but Democrats are pushing for an extension of the payroll tax cuts implemented a couple of years ago.

"They want to extend that payroll tax holiday and expand it and try to put some political pressure on Republicans to pay for it with the millionaire's tax," said Todd Zwillich, Takeaway Washington correspondent.

The tax cut, which expires Dec. 31, reduced the payroll tax from 6.2 percent to 4.2 percent. Payroll taxes pay for social security and medicare, primarily. The cut provides an extra few dollars per paycheck back to workers and, for those earning just less than $106,000 per year, is worth as much as $2,136 per person over the course of 2012.

Democrats are hoping that by linking the issue with their millionaire's tax, they can gain some political leverage on Republicans.

"They've spent so much time fighting to preserve the Bush tax cuts for the millionaires, it's hard to believe they won't want to preserve a tax cut for the middle class," said Sen. Charles Schumer on NBC's Meet the Press this week.

But Republicans, many of whom already oppose extending the payroll tax cuts because they say it's not stimulative enough and pressures Social Security, are unlikely to support using the millionaire's tax to pay for this particular proposal.

"By taxing the people who provide the jobs, you put off the day that we have economic recovery and job security in this country," Republican Rep. Jon Kyl of Arizona said this weekend.

However, Democrats have signaled a willingness to consider other means to pay for the extension, and many Republicans have expressed an interest in the tax cuts being extended. Consequently, Zwillich said, it's likely that a deal will be reach and the tax cuts will be extended.

Related Stories