'World News' Political Insights: President Obama Picks Tax Fight With GOP

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"We don't need short-term gestures. We need long-term fundamental changes in our tax structure and our regulatory structure that people who create jobs can rely on," Sen. Lamar Alexander, R-Tenn., told the Associated Press when asked about the payroll tax proposal.

Issues of taxing and spending will gain fresh relevance this fall, with the president's latest economic proposals expected as a package next month, and the special deficit super-committee scheduled to report back shortly before Thanksgiving.

It's unclear how that committee will recommend dealing with the payroll tax issue. But it will be on Washington's agenda even if it's ignored by the deficit panel: The tax rate reverts to its regular, higher level as of Jan. 1, unless Congress acts before then.

Democrats have rarely fared well fighting over taxes with Republicans. National polls have shown that Obama has been blamed -- wrongly -- for enacting higher taxes. He's been forced to cave on big tax fights with Republicans already, most notably with last year's deal extending the Bush tax cuts two years.

But the president has had some success scrambling the politics of taxes in 2008, by attacking presidential rival John McCain for favoring a new tax on health care. Some of his ads drew criticism for containing half-truths, but the strategy helped neutralize McCain's attacks on Obama over taxes during the campaign.

Obama campaign aides hope for a fight that will draw clear distinctions between the president and Republicans in Congress. They see the seeds of a political revival not just in an economic turnaround but in having a debate over the future of the economy, on terms of their own choosing.

It won't only be Republicans relishing a tax debate in 2012, if the next few months play out as the White House hopes.

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