Earlier this week, representatives of House Speaker John Boehner (R-Ohio) scrambled to do damage control following his comments Monday to ABC News advocating cuts to Big Oil subsidies.

In an interview with ABC News’ Jonathan Karl, Boehner had this to say:

It’s certainly something we should be looking at. We’re in a time when the federal government’s short on revenues. They ought to be paying their fair share…Everybody wants to go after the oil companies and frankly, they’ve got some part of this to blame.

A Boehner spokesman quickly characterized his boss’s comments as an attempt to avoid a trap sprung by ABC’s Karl:

The Speaker made clear in the interview that raising taxes was a non-starter, and he’s told the president that. He simply wasn’t going to take the bait and fall into the trap of defending ‘Big Oil’ companies. Boehner believes, as he stated in the interview, that expanding American energy production will help lower gas prices and create more American jobs. We’ll look at any reasonable policy that lowers gas prices. Unfortunately, what the president has suggested so far would simply raise taxes and increase the price at the pump.

The dial-back didn’t stop President Obama from firing off an arch letter to Boehner, writing that he “was heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies for the oil and gas industry.”

Meanwhile, Senate Majority Leader Harry Reid (D-Nev.) has said that, after Boehner’s comments opened a crack in the Republicans’ armor, Democrats will waste no time in pursuing legislation to end the subsidies. In a Wednesday press conference, he said that his party will push consideration of President Obama’s proposal to repeal Big Oil tax breaks as early as next week. “There’s no necessity for these subsidies,” he said. “The companies have broken all records for profits.”

Oil industry insiders have lashed out at the Democrats’ attempt to end oil subsidies as job killers. Reuters reports:

“This is a tired old argument we’ve been hearing for two years now. If the president were serious about job creation, he would be working with us to develop American oil and gas by American workers for American consumers,” the American Petroleum Institute’s chief economist John Felmy said.

And yet, if first quarter trends continue through the rest of the year, Exxon alone stands to net ten times as much in profits as the entire industry receives in subsidies. From January to March, despite skyrocketing gas prices for consumers, Exxon made $10.65 billion in profits. This is the highest quarterly profit Exxon has reported since it made $14.83 billion in the third quarter of 2008.

The Democratic Congressional Campaign Committee responded to the flare-up by capitalizing on the media hype over the impending British royal wedding, snatching up the domain roilwedding.com (“R-Oil wedding,” an admirably reaching pun on “royal wedding”). The DCCC is using the site as a tongue-in-cheek online petition congratulating the “marriage” of Boehner and other Republicans to oil interests.

The midterm hangover having finally worn off, the 111th Congress returns Monday to kick off the lame-duck session, its last hurrah before its successor takes over. And the 112th Congress will look radically different, with Republicans in control of the House and the Democratic majority in the Senate significantly reduced. These next few weeks, then, could be the last chance for major Democratic initiatives. But the hurdles are high, and Republicans see no reason to grant Democrats any victories after the populace voiced its discontent with the policies of the past two years.

The battle lines are drawn; here are the fields on which they’ll be fought.

Bush tax cuts:

The biggest question before the Senate — and the one that will likely receive the most attention — is the expiration of the 2001 tax cuts signed into law by President Bush. Facing Democratic resistance in the Senate at the time, Republicans set up the cuts to sunset after ten years. Now that they’re set to expire, however, GOP lawmakers have lined up shoulder to shoulder to make them permanent.

President Obama, on the other hand, ran for office on a pledge to extend the existing tax rates for families making less than $250,000 a year, while letting the tax cuts for those making over that number expire. But as the economy continued to falter and Democratic re-election prospects began looking bleak, Democrats in Congress put off addressing issues related to the tax code until after the midterm elections. Now that Republicans have made big gains in both chambers of Congress, Democrats find their confidence further weakened.

Following the midterms, the White House has signalled that Democrats might be willing to compromise on the idea of a permanent extension of tax cuts for middle-class families and a temporary extension of cuts for the two percent of Americans families making more than $250,000, but it won’t stomach the approximately $700 billion in additional debt that would be required to extend those cuts permanently. Republicans, on the other hand, haven’t deviated from their position that the tax cuts for all Americans be kept together as a package deal.

If neither side blinks, taxes are set to rise for all Americans effective January 1. Neither party wants to be seen as responsible for a tax hike during difficult economic times, but Democrats have appeared far more worried at the prospect of getting blamed should negotiations break down. Polls favor the Democrats’ position that the tax cuts for the wealthiest Americans should be allowed to expire, but without the votes of at least two Republicans in the Senate, the proposal is likely to fail. Barring momentum in Congress for the creation of a new tax bracket — for people making half a million dollars or a million dollars per year — in order to better rhetorically define the class of folks for whom Republicans are advocating tax relief, the easiest and most likely outcome will be a bill that temporarily extends all the tax cuts, simply kicking the decision of what to do to some point farther down the road.

Unemployment insurance benefits

As Congress frets over whether the marginal tax rate for incomes over $200,000 should be raised three percentage points, the Senate is also on the verge of allowing federal unemployment benefits to lapse — again. Extending the benefits before they expire on November 30 might seem like a no-brainer: It would prevent somewhere between 1.2 and 2 million unemployed Americans from having their subsistence checks cut off just in time for Christmas and would reduce the risk of a drop in consumer spending and economic growth as high as 0.4 percentage points from December to February.

Republicans might have trouble arguing that deficit reduction trumps other priorities, including unemployment benefits, when the only major initiative the GOP is pushing — extending the Bush tax cuts for the upper 2 percent of wage earners — would increase the deficit by $700 billion over ten years. That said, Republicans in the Senate, along with Sen. Ben Nelson (D-Neb.), are likely to vote against any extension of unemployment insurance benefits unless Democrats can come up with ways to offset their cost.

The last time unemployment benefits were set to lapse, back in early June, the Senate was unable to muster enough votes to renew an extension for 51 days. With Republican Sens. Olympia Snowe and Susan Collins of Maine joining Democrats to vote for cloture, and Nelson joining with Republicans to vote against debate, Democrats had no choice but to wait for Sen. Carte Goodwin (D-W.Va.) to be sworn in as a replacement for the late Sen. Robert Byrd (D- W.Va.) in order to garner a 60th vote.

This time, assuming all the senators maintain their positions in the debate, the hurdle will be that much higher for Democrats after Rep. Mark Kirk (R-Ill.) takes the seat of Sen. Roland Burris (D-Ill.) on Nov. 29. With one fewer assured vote, Democrats would either have to come up with a package of equivalent spending cuts that satisfies Republicans’ demands or persuade one more Republican to join their cause. Neither scenario appears particularly likely, however, which is why many unemployed Americans are bracing for the worst come Nov. 30.

“Don’t Ask, Don’t Tell”

A long-awaited Pentagon study on ending the practice of “Don’t Ask, Don’t Tell,” the 17-year-old law that requires military service members to keep their sexual orientation secret, isn’t due to President Obama until December 1, but early media reports indicate that it will buttress gay rights advocates’ arguments to repeal the law. More than 70 percent of the respondents in the Pentagon survey indicated that repeal would have either positive, mixed or nonexistent effects, leading the authors to conclude that the military can lift its ban on gay and lesbian Americans serving openly in uniform while incurring minimal risk in its current war efforts.

If the study brings good news to those hoping to repeal the law, however, the current situation in the Senate should not. Senate Majority Leader Harry Reid (D-Nev.) attempted to repeal “Don’t Ask, Don’t Tell” before the midterm elections, tacking the provision onto a defense reauthorization bill that failed to overcome a Republican-led filibuster in the Senate. The bill was weighed down by many add-ons — including the DREAM Act, which seeks to extend a path to citizenship to some undocumented immigrants who attend college or serve in the military — giving too many senators excuses to vote against it, but advocates remained hopeful that repeal could pass along with the defense bill when Congress resumed for its lame-duck session.

Now Sen. John McCain (R-Ariz.), ranking member of the Armed Services Committee, is said to be negotiating with Sen. Carl Levin (D-Mich.), the committee chairman, to remove the DADT repeal provision from the defense bill. McCain had previously voiced openness to authorizing a repeal of the law following the Pentagon’s review, but since that time his views have hardened. During his re-election battle earlier this year, McCain faced a primary challenger from the right and promised during his campaign to preserve the law.

In the absence of support from McCain, advocacy groups have identified 10 senators who have indicated in the past that they’d like to see the Pentagon’s study before deciding on whether to lift the military’s policy. The list includes Sens. Scott Brown (R-Mass.), Lindsey Graham (R-S.C.), Judd Gregg (R-N.H.), Mark Pryor (D-Ark.), Oympia Snowe (R-Maine), George Voinovich (R-Ohio) and Jim Webb (D-Va.). Once the results of the study are known, gay rights groups hope these senators will take them to heart and vote for repeal. If they follow McCain’s lead and renege on their previous openness to getting rid of the law, however, it may be a long time before Congress can muster sufficient votes to repeal the policy.

Campaign finance reform

Following an election season that saw record amounts of cash — including a fair chunk from undisclosed sources — spent on political advertising by outside groups, campaign finance reform advocates are still hoping that Democrats in Congress might take advantage of their remaining time in charge of both chambers to pass legislation to shore up the loophole-ridden landscape of campaign finance law. The most popular effort, by far, during the last year has been a bill called the DISCLOSE Act, which would require all groups spending money on electioneering activities in future elections to disclose their major donors.

While premised on a fairly bipartisan concept of full disclosure, the bill soon ran into trouble in the Senate over additional components that had been added on to it. Measures to prohibit campaign spending by companies holding government contracts or those exceeding a certain threshold of foreign ownership were read by Senate Republicans as an attempt to privilege union speech over that of corporations. Traditional campaign finance reform advocates like Sens. Olympia Snowe (R-Maine) and Susan Collins (R-Maine) held onto such objections and voted against cloture for the bill when Democrats declined to take them out.

Now Democrats in the Senate are contemplating one last attempt to pass a stripped-down version of the DISCLOSE Act — one that sticks strictly to the principle of transparency that Republicans once advocated as their gold standard for effective campaign finance legislation. But Senate Minority Leader Mitch McConnell (R-Ky.), a staunch opponent of nearly all campaign finance legislation, might prove an even biggest obstacle to the bill’s passage than any single aspect of the legislation. While Snowe or Collins, or even Sen. Scott Brown (R-Mass.) or Senator-elect Mark Kirk (R-Ill.), might prove receptive to the measure in principle, it appears highly unlikely that any of them are willing to buck their party leadership for the cause.

Energy/environment

Even if the lame-duck session likely represents the best opportunity for Democrats to pass key pieces of energy legislation before a more Republican Congress comes to town, it seems unlikely that anything significant will move.

The House, for its part, has already passed a cap-and-trade bill and an oil spill response bill, and all eyes are now on the Senate. But it looks like major energy action in the chamber will have to wait until next year, if it happens at all.

One clean energy advocate with close ties to Congress downplayed the likelihood that energy legislation will pass during the lame duck. “Little will happen, probably,” he said.

The only energy-related bill that is likely to see the light of day during the lame-duck session is a proposal to encourage the production of electric and natural gas vehicles. Senate Majority Leader Harry Reid (D-Nev.) has scheduled a cloture vote for Wednesday on the bill, the Promoting Natural Gas and Electric Vehicles Act of 2010. The bill has bipartisan support.

Asked about the prospects for energy legislation during the lame duck in the Senate, Regan Lachapelle, a spokeswoman for Reid, said, “We filed cloture on a motion to proceed to a natural gas bill before we left. Other than that, we have many items that are possible for consideration during the lame duck.” Lachapelle did not elaborate on the pieces of legislation to which she was referring.

Backers of a renewable energy standard, which would require that a certain percentage of the country’s electricity come from renewable sources like wind and solar, are keeping their fingers crossed that such a proposal can move in the lame-duck session. “We’re optimistic about the lame duck,” said one RES proponent who was not authorized to talk on the record.

Reid and Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) spoke on the phone Tuesday about the possibility of moving an RES during the lame duck. Bingaman’s spokesman, Bill Wicker, would not discuss the call. “This was a private conversation between two Members, so I have to respect that,” he said in an email. “But we all should know more about the lame duck before much longer.”

But a senior Senate aide with knowledge of the conversation downplayed the possibility that an RES would be brought up for a vote during the lame-duck session. “They had a good conversation and agreed it will be challenging to get 60 votes for expedited consideration of an RES during the limited time left in the session,” the aide said of discussion between Reid and Bingaman. Indeed, RES supporters would need to secure the support of two to four Republicans in addition to the four who already support the bill in order to get 60 votes.

An oil spill response bill and various pieces of legislation to promote energy efficiency and home weatherization are all pending in the Senate. But it looks like consideration of those bills will have to wait until next year.

DREAM Act

Reid and Pelosi have vowed to push for a lame-duck vote on the DREAM Act, a bill that would allow some undocumented young people who came to the United States as children to gain legal status for attending college or serving in the military.

In the House, the vote could come as early as this week, Democrat sources told Politico. Reps. George Miller (D-Calif.) and Xavier Becerra (D-Calif.) were reportedly tasked by Pelosi with determining whether the caucus would be able to pass the bill.

If the act does not pass in the lame-duck session, it has very little chance of passage before 2013. Rep. Steve King (R-Iowa), who is expected to head the House subcommittee on immigration, refers to the DREAM Act as “amnesty” and promised he would use his authority in the GOP-led House to block the act. GOP gains in the Senate also lessen the likelihood of passing the bill next session.

Reid recently said he would need support from “a handful of Republicans” to pass the bill during the lame duck, echoing estimates by bill sponsor Sen. Dick Durbin (D-Ill.) that at least five Republicans would need to support the bill for it to pass. A spokesman for Reid confirmed last week that he plans to bring up the DREAM Act for a vote during the lame-duck session, although it is still unclear whether it would be as a standalone measure or as an attachment to another bill.

The problem is that Reid doesn’t have much time — or sure support for the DREAM Act from his caucus. The act last came up for a vote in 2007, and seven of the eight Democrats who voted against it then are still in the Senate. While a few might support the bill this time around, five told The Hill in September they are still undecided on the DREAM Act.

Complicating matters, Mark Kirk’s assumption of Roland Burris’ seat in the Senate turns a sure “yes” vote into a likely “no.” Kirk has been lobbied heavily by DREAM Act supporters, but said before the election that he would vote against the act unless border security measures were pushed first. “It’s not time for the DREAM Act right now,” he told reporters in October. “If the DREAM Act came up for a vote right now, I would vote ‘no.’”

All current Republican senators voted in September to filibuster the defense authorization bill after Reid announced plans to attach the DREAM Act. But given the additional controversy over that bill — it included a repeal of “Don’t Ask, Don’t Tell” and would have allowed for only limited changes from Republicans — it’s tough to extrapolate much from it about how senators would vote on the DREAM Act as a standalone bill.

Sen. Robert Bennett (R-Utah) said he would support the bill if it were brought to the floor on its own, even though he opposed it as part of the defense authorization bill. Sen. Richard Lugar (R-Ind.), who co-sponsored the bill, would also almost certainly vote for it if it comes up in the lame-duck session.

Several other Republicans voted for the DREAM Act in 2007, but their support this year remains uncertain because of rightward shifts on immigration policy and the possibility of the bill again being attached to other legislation. Sen. Orrin Hatch (R-Utah) was an original sponsor of the bill when it was first introduced in 2001 and voted for it in 2007. This year, he said the government should secure the borders before it focuses on the DREAM Act.

Written by Jesse Zwick, Andrew Restuccia and Elise Foley.