The Associated Press reports: “President Barack Obama raised the threat of a veto Wednesday if Republicans try attaching controversial oil pipeline or other language to a bill renewing payroll tax cuts and unemployment coverage, intensifying their year-end partisan showdown. Obama’s warning — which prompted an immediate and equally bellicose response from the GOP — signaled that there is no easy end in sight as the two sides maneuver over renewing tax reductions and jobless benefits that without congressional action expire Jan. 1 — just as the 2012 election year begins.” In other words, the Republicans think they have found a way out the unpleasant corner in which they have found themselves (allow the payroll tax to go up or succumb to Obama’s class-warfare, tax-the-rich scheme).

On the pipeline issue the GOP has the upper hand. House Speaker John Boehner’s spokesman sent around this comment: “We are working on a bill to stop a tax hike, protect Social Security, reform unemployment insurance, and create jobs. If President Obama threatens to veto it over a provision that creates American jobs, that’s a fight we’re ready to have.” Senate Minority Leader Mitch McConnell was only too happy to turn the screws on Senate Democrats whose states would benefit from the pipeline. The Hill quotes McConnell:

“The President started getting heat from the environmental activists he’s counting on to stuff envelopes next year, so he put off a decision until after the election. If this episode tells us anything, it’s that the President is clearly more concerned about getting himself reelected next year than getting somebody in Nebraska or Kansas or South Dakota or Missouri a job today.”

The pipeline, and domestic energy development in general, is a popular issue with Republican presidential candidates. Texas Gov Rick Perry’s spokesman told me last night: “The XL pipeline will create thousands of good American jobs and reduce our dependence on hostile sources of foreign oil. It deserves quick approval in the interest of jobs and energy security regardless of the payroll tax.” Mitt Romney specifically included the XL pipeline as one of his proposals in his jobs plan: “As president, Mitt Romney will seek to promote those relationships. In addition to ensuring rapid progress on the Keystone XL Pipeline, a Romney administration will pave the way for the construction on additional pipelines that can accommodate the expected growth in Canadian supply of oil and natural gas in the coming years.”

In some ways the payroll tax fight exemplifies the contrasting election messages of the two parties. The Republicans, as Rep. Paul Ryan (R-Wis.) has put it, want to push policies that ”grow the pie” through economic growth and upward mobility. Obama, as he did in Kansas, is trumpeting his class-warfare message, filled with Occupy Wall Street rhetoric and slams at greedy capitalists. The GOP thinks it has a winning message and that Americans are not going to fall for appeals to envy and fear. We’ll find out in less than a year which side’s message has more appeal.