The select group of bipartisan lawmakers responsible for striking a long-term extension of the payroll tax cut and unemployment insurance met formally for the first time this afternoon, hoping to cut a deal before the funding runs out for those programs at the end of February.

Rep. Dave Camp, the chairman of the House Ways and Means committee, was designated the chairman of the negotiations, while Sen. Max Baucus, the chairman of the Senate Finance committee, was picked as the vice chairman.

The conference committee must also figure out a way to reconcile funding for the sustainable growth rate, also known as the Doc fix, which reimburses physicians for Medicare services.

"The biggest issue I see is that the House, and only the House, has put forward a plan to extend for one year the payroll tax holiday, unemployment insurance benefits and payments to doctors treating our nation's seniors and those enrolled in Medicare," Camp, R-Mich., said.

"As you can see, we have our work cut out for us," he said. "I am confident that if every member of this conference committee is committed to finding a solution, we can and will do it."

In addition to Baucus, Senate Majority Leader Harry Reid selected Jack Reed, Ben Cardin and Bob Casey to represent Senate Democrats.

"We've all come here from different places and we've fought for different priorities, but now we're all in the same boat," Baucus said. "This isn't about a Washington debate. It's about the consequences to our economy if we don't deliver. Those consequences are real, and they affect each and every family we represent."

The conference committee is a product of Congress's compromise on a two-month extension of the three measures that was signed into law at the end of December. Republicans had passed a year-long extension, but efforts to agree with the Senate on a bill of that length proved futile. After weeks of brinksmanship, House Republicans finally caved just before Christmas and agreed to the Senate's two-month temporary fix.

Reid, D-Nev., said today that he is optimistic that the payroll tax committee can conclude its business quickly - before the deadline Feb. 29.

"From all that I have heard from the Republicans, they want to do something and get this completed for a full year. That's what they've said, and we hope that can be accomplished," Reid said following the Senate Democrats' weekly policy lunch. "I am hopeful that we can work toward completing this very quickly."

Reid said he fully expects his appointees on the committee to "push" for the so-called millionaire's surtax.

"We still believe that's the fair thing to do," he said.

In the past, Baucus, D-Mont., has been a supporter of the Keystone XL pipeline. Asked today if he would pressure Baucus to not include that provision as part of the payroll tax extension, Reid said Baucus is a "free agent," but added of the Republicans' proposals for the pipeline's inclusion, "If they have some reasonable proposals, I'll be happy to look at them. But that doesn't sound too reasonable to me."

Other than Camp, House Speaker John Boehner chose Nan Hayworth, Tom Price, Renee Ellmers, Kevin Brady, Fred Upton, Tom Reed and Greg Walden to represent House Republicans. Senate Republicans appointed Jon Kyl, John Barrasso and Mike Crapo to the conference committee. House Democrats Xavier Becerra, Sander Levin, Allyson Schwartz, Chris Van Hollen and Henry Waxman round out the conference's negotiators.

ABC News' Sunlen Miller contributed to this report.