A deal appears to be close on extending all Bush tax cuts in exchange for funding jobless benefits for about 6 million Americans who will lose them by the Spring:

On CBS's "Face the Nation," Kyl told host Bob Schieffer: "I think that most folks believe that the recipe would include at least an extension of unemployment benefits for those who are unemployed and an extension of all the tax rates for all Americans for some period of time."

On the same program, Sen. Richard J. Durbin (Ill.), the Democratic whip, reluctantly concurred.

"I can tell you that without unemployment benefits being extended, personally, this is a non-starter," he said. "The notion that we would give tax cuts to those making over $1 million a year . . . is unconscionable." But, he added: "We're moving in that direction."

On Saturday, the Senate rejected two Democratic proposals for extending the Bush-era tax cuts, which the Republicans prefer to call "tax rates," because they have been in effect for so long. One would have extended them for the first $250,000 of family income. The second would have extended them for the first $1 million.

The fact that a handful of Democratic senators voted along with every Republican gave McConnell a swaggering confidence that the tax cuts will live on intact.

Many Republicans would prefer the tax cuts be made permanent but Obama would never sign such legislation and as a consequence, everyone's taxes would go up January 1. The extension should be given for 3 years but that also doesn't seem likely. The Dems want to play at class warfare in 2012 and paint the GOP as the party of "the rich."

As for once again extending jobless benefits, there are good arguments on both sides. Many economists believe that unemployment benefits past a certain point keep discouraged workers from going out and looking for a job. Others point to the impossibly difficult employment picture in many parts of the country where jobs - any jobs - are extremely difficult to come by and the extension is necessary.

I think that last employment report which showed only 39,000 jobs being created probably tipped the balance in favor of extending the benefit. The question will be; Can Obama bring his own party along in extending the tax cuts?

Judging by what many Democrats are saying, it will certainly be a test of the president's influence within his own party. Failure will send a signal that Obama is extremely vulnerable not only to Republican challenges, but perhaps even pointing to a primary opponent in his own party.