Washington (CNN) - In an effort to offset the cost of extending the current payroll tax cut for one year, Senate Republicans on Wednesday proposed freezing federal salaries, reducing the federal work force and keeping millionaires from getting food stamps and unemployment benefits.
The proposal would raise the $120 billion to cover the payroll tax and would bring in an additional $111 billion Republicans say would be used to pay down the nation's debt.
Details of the GOP plan came a day after party leaders first publicly embraced continuing the tax break, which many complained was not successful in stimulating the economy.
"It's important to underscore, however, that the only reason we're even talking about extending a temporary cut in the payroll tax is because President Obama's economic policies have failed working Americans," Senate Minority Leader Mitch McConnell, R-Kentucky, said in a statement.
Democrats want a broader payroll tax cut than Republicans and want to pay for it with a surtax on millionaires.
Democrats reacted warily to the GOP plan but did not reject it outright. One senior Democratic aide told CNN said there is "skepticism" among Democrats because Republicans want to "cherry pick" items discussed in the context of a broader deficit-reduction agreement by the so-called super committee. The aide said Democrats might be flexible on how the costs are offset if Republicans show similar flexibility in expanding the tax break.
In a statement, a spokesman for Senate Majority Leader Harry Reid, D-Nevada, said Democrats are "glad" Republicans now want to extend the tax break.
"The Republican proposal cannot pass the Senate as it stands, but now that Republicans have reversed their position on the middle-class tax cut, we look forward to working with them to negotiate a consensus solution," spokesman Adam Jentleson said.
Republican aides said their plan – which drew on ideas from President Barack Obama's deficit commission – would impose a three-year freeze on federal salaries and reduce the size of the federal work force by 10% by not replacing workers when they quit or retire.
In addition, in an apparent counter to criticism from Obama and other Democrats that Republicans protect millionaires, the GOP plan would require high-income Americans earning $750,000 or more to pay higher premiums for Medicare and would prevent millionaires from getting food stamps or unemployment compensation. A Republican aide cited the Congressional Budget Office as determining that these three items would raise about $9 billion over 10 years, most of it from the means-testing of Medicare.
However, "several hundred million dollars" would come from banning food stamps and unemployment compensation. The aide explained there are examples of high earners losing their jobs and then filing for and getting these benefits.
The Republican plan also includes a provision called the Buffett Rule Act – named for investor Warren Buffett, who recently complained his secretary pays taxes at a higher rate than he does.
The provision would allow taxpayers "who feel they are not taxed enough to voluntarily donate any amount of money to the U.S. Treasury on their tax returns for the purpose of paying down the national debt," according to a Republican summary of their proposal.
The Republican payroll tax plan is narrower than the one Democrats are pushing. Republicans would extend the current law, which reduced the 6.2% payroll tax for individuals to 4.2%. Democrats want to lower the tax to 3.1% and extend it partially to employers.
The Republican plan would mean an average middle-class family would get up to about $1,000 more next year; the Democrats' plan means they would get up to an extra $1,500.