Cantor says GOP will reject any tax hike to pay for payroll tax holiday

House Majority Leader Eric Cantor (R-Va.) indicated Thursday morning that Republicans would reject any tax hike as a way to pay for a full-year extension of the payroll tax holiday.

"[W]e as Republicans in this House do not support taxes going up on anybody. We don't believe you ought to tax anybody," he said on the floor.

"We hope that the conferees can produce something for us to vote on, but we are not in any way, shape or form advocating for taxes to go up on hard-working people," he added.

Cantor's remarks raise the question of whether the two parties can reach a deal on the payroll tax holiday by next week, a deadline both sides are hoping to make. Cantor spoke in a back-and-forth with with House Minority Whip Steny Hoyer (D-Md.) in which Hoyer repeated that Democrats are hoping to pay for the extension with higher taxes on the wealthy.

"We do believe, yes, a greater contribution is in order because our country … has a challenging situation that we need to respond to," Hoyer said.

Hoyer also pressed Cantor on whether Congress will be able to reach an agreement by next week, as the House will be out the following week. Cantor pointed to today's passage of a resolution calling for some agreement within the week as a sign that everyone wants an agreement soon, but could not guarantee a time.

"We too desire a resolution to this issue next week," Cantor said. "It's imperative for us to send a signal to hard-working taxpayers of this country they're not going to have their taxes go up.

"So it's my hope that we're going to see some productivity out of the conference committee."

Hoyer said some Democrats are worried that no agreement will be reached by the end of February, when the holiday expires, because of past comments from Republicans that they don't really support the holiday at all. Hoyer cited comments from House Ways and Means Committee Chairman Dave Camp (R-Mich.), also the chairman of the House-Senate conference committee on the bill, who said last year that he does not think extending the holiday is a good idea.

"It gives us some concern that the leadership of the conference committee, Mr. Camp and others, are in the position where they don't really think … that this tax cut ought to be extended," Hoyer said.

But Cantor rejected the implication that Republicans oppose the extension.

"Really, it's not productive to engage in the politics of division," he said. "We ought to be about be about multiplication here. We ought to be about growing the economy."

As he did last week, Cantor blamed Senate Democrats for slowing down the process by not putting forward any other proposals for paying for the payroll tax cut extension.

"There's been on willingness on the part of [Senate Majority] Leader [Harry] Reid and his conferees to even offer a suggestion as to how to resolve this impasse," he said.

House Republicans have proposed paying for the extension by freezing federal pay for another year, and other cuts and reforms to current spending programs. Republicans in particular have argued that the extension should be paid for because the payroll tax funds the Social Security Trust Fund.

Cantor and Hoyer spent some time today arguing over whether the extension should be paid for at all. Hoyer said Republicans want to pay for this tax holiday extension, but had no interest in paying for the broader tax cuts in 2001 and 2003.

But Cantor shot back that the payroll tax holiday should be paid for because it funds Social Security, and asked Hoyer if Democrats agree. To that, Hoyer seemed to indicate that a pay-for might not be needed.

"I believe there is a trust fund, and I think we have a moral responsibility to make sure that that trust fund is kept whole," Hoyer said. "And in fact, as you well know, we will keep it whole. We will sign the proper IOUs so that that trust fund is intact."

Cantor said that response seemed to show that Democrats might be fine with simply extending the tax holiday without finding other ways to keep the trust fund current.

"It bothers me to hear that the gentleman just wants to rely on an IOU," Cantor said. "The public is tired of saying, 'yes, we'll owe it, we'll owe it, we'll pay it later.' "

But Hoyer further clarified his remarks to say he has always favored paying for the holiday.

"I didn't say that at all," he said. "I think it ought to be paid for."

Hoyer has often come to the floor to argue that Republicans have not always found ways to pay for past tax cuts, and repeated his preference to ensure that Congress accounts for potential revenue losses.

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