Rep. James Lankford, R-Oklahoma City, said there is a sense among Republicans that refusing to extend the payroll tax cut — enacted as a temporary measure last year — would be viewed as a tax increase.
“The pure optics are part of this, obviously,'' Lankford said.
Rep. Tom Cole, R-Moore, said partisan sniping over the details of a package to extend the tax cut and long-term unemployment benefits may leave people wondering whether lawmakers were “really trying to secure tax relief or score political points.”
Cole said Republicans were trying to find common ground with Obama, even though many were not enthusiastic about the extensions, but that the president was still “going to rail and demagogue on it.”
“There are going to be a lot of twists and turns and some sharp disagreements before it's over,” Cole said.
There already are very sharp disagreements, as Democrats want to raise taxes on millionaires to make up for the payroll tax money diverted from Social Security — something Republicans oppose. House Republicans want an expedited decision from Obama on an oil pipeline before backing the tax cut extension, while Democrats don't want the pipeline in the package.
Rep. Dan Boren, D-Muskogee, said, “Which party comes out as the winner in this has yet to be determined.”
Boren's position is more aligned with that of many Republicans. He doesn't think the payroll tax cut enacted last year is big enough for many people to notice since, for the average family, it is less than $1,000 spread out over 12 months.
But he may be willing to back another year of the payroll tax cut if the provision for expedited consideration of the Keystone XL pipeline is part of the package. The proposed 1,700 mile pipeline would run from Canada, through Oklahoma, to the Texas Gulf Coast.
Boren said Obama and Democrats have the political advantage now, since Republicans have portrayed themselves as the party of tax cuts, but he said the tables could be turned as the debate progresses if Republicans show themselves willing to negotiate.
The Keystone XL pipeline, with its promise of thousands of construction jobs, could help the GOP, Boren said.
The path forward is not entirely clear, and Oklahoma lawmakers predicted negotiations may last almost until Christmas.
Republicans argue that increasing taxes on the rich penalizes job creators but had a tough time combating Obama's message that the wealthy should do a little more just to give everyone else a $1,500 tax break.
In a clever twist, House Republicans threw up a roadblock, making a payroll tax extension conditional on Obama agreeing to a controversial US-Canada oil pipeline project, thrusting the president back into a heated row.
The president last month deferred a decision on whether the pipeline, which supporters say will create thousands of jobs, should be built, drawing claims he caved in to environmentalists and liberals in the Democratic coalition.
"The President says the American people can't wait on jobs. Well guess what, we agree wholeheartedly with the president," said House speaker John Boehner.
"The Keystone pipeline project will create tens of thousands of jobs immediately."
With the House expected to vote early next week, Obama has issued a veiled threat to veto any bill to extend the payroll tax cut that includes the pipeline project.
And top Senate Democrat Harry Reid warned: "If the House sends us their bill with Keystone in it, they are just wasting valuable time because it will not pass the Senate."
Other sweeteners included in the House bill to win Republican votes, including an attempt to defund part of Obama's healthcare law, are also likely to be stripped out by the Democratic Senate.
The new wrangling is likely to further run out the clock towards the Christmas holidays, as any changed Senate bill will have to go back to the House for another vote.
Keystone also looms as a tough end-of-year vote for Democratic lawmakers torn between their president and a project touted as a job creator.
"The president is serious. But in politics, I think everybody understands that you get the best deal you can," said Representative Emanuel Cleaver, an ally of Obama, apparently suggesting the president could back down.
Christmas showdowns between Obama and Congress are nothing new and help set the tone for the political fights to come.
In his first festive season in office in 2009, the president fought up until Christmas Eve to win Senate passage of his landmark health care reform law.
Last year, Obama dueled with Republicans, agreeing an extension to Bush-era tax cuts and winning Senate ratification of a new nuclear deal with Russia, a victory which replenished his political stock after a mid-term election rout.
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