Though top GOP leaders went from being on the fence about the payroll tax cut to being fully supportive of it several weeks ago, many, many rank and file members have been, at best, skeptical of the idea all along.
This played out in dramatic fashion a couple weeks ago when Senate Minority Leader Mitch McConnell lost more than half his caucus in a vote on a partisan GOP version of the payroll tax cut he had authored. The outcome stunned onlookers, particularly because McConnell can typically control his caucus better than any of the other leaders on the Hill. Most people concluded that that, either out of insouciance to the middle class or antipathy to President Obama or genuine policy disagreement, Republicans simply didn't care if the payroll tax cut expired.
But it doesn't really matter why they voted no, or whether McConnell got embarrassed by his members. The effect was to turn the payroll tax cut into something Republicans would only be able to sign off on reluctantly -- and at a steep price. In other words, after they'd accepted that allowing it to lapse would turn into a political catastrophe, they turned it into a bargaining chip instead of a direct concession. That's why they now have leverage, and can make steep demands in these last minute negotiations.