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Cantor Leaves Door Open to Extending U.S. Payroll Tax Cut

House Majority Leader Eric Cantor left open the possibility he might accept President Barack Obama’s proposal to extend the U.S. payroll tax cut set to expire at year’s end.

“It is something I supported in the past,” and “will be part of the discussions ongoing,” the Virginia Republican told reporters in Washington today.

Citing voter frustration with the political rancor in Washington, Cantor struck a conciliatory tone, voicing determination to put aside policy differences with Obama and other Democrats and agree on ways to create jobs and find $1.5 trillion worth of budget savings mandated by legislation that raised the government’s borrowing authority.

“People in the country are very anxious” about the economy and “they lost a lot of confidence in Washington,” he said.

“They are sick and tired of the rancor in this town,” Cantor told reporters. “The country doesn’t want a blame game anymore, they want to see solutions and results.”

Obama is scheduled to propose his jobs plan in a speech tomorrow evening to a joint meeting of Congress. Senate Minority Leader Mitch McConnell, a Kentucky Republican, didn’t rule out backing an extension of the payroll tax cut. “We’re happy to listen to the president’s proposals and take them under consideration,” he said.

Photographer: Andrew Harrer/Bloomberg

House Majority Leader Eric Cantor’s call for budget cuts to pay for damage caused by Hurricane Irene didn’t sit well with another prominent Republican. Close

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Photographer: Andrew Harrer/Bloomberg

House Majority Leader Eric Cantor’s call for budget cuts to pay for damage caused by Hurricane Irene didn’t sit well with another prominent Republican.

‘Difficult Thing’

Alabama Senator Jeff Sessions, the top Republican on the Senate Budget Committee, said extending the payroll tax cut would be “a difficult thing” because “you don’t pay it if you’re not working.”

Second-ranking House Democrat Steny Hoyer of Maryland said today most Republicans he has talked to on the 12-member supercommittee assigned to find the budget savings are committed to “try to get to a ‘yes,’ a successful vote, not gridlock.”

A failure to reach agreement on the savings would result in automatic spending cuts.

Lawmakers in both parties heard from voters during the August recess that “government’s got to work and they don’t think it’s working right now,” Hoyer said.

Obama will need “some receptivity from Republicans” to win acceptance of his job-creation plans, he said.

‘Two to Tango’

“It takes two to tango,” Hoyer said when asked what Obama needed to do to end the partisan strife that has marked debates in Congress this year.

In not immediately rejecting Obama’s proposal to extend the 2-percentage-point reduction in the payroll tax, Cantor said there are “better ways to focus on small-business growth.”

“Republicans are not for raising taxes,” he also said.

The Center for Budget and Policy Priorities, a Washington- based group that advocates measures to help the poor and working families, said a failure to extend the payroll tax cut past its Dec. 31 expiration would take money out of the economy. The tax cut provided the average worker with an extra $934 a year, according to the center’s study.

Cantor also said he won’t insist on holding up federal disaster relief funds until lawmakers find spending offsets in the budget.

Not Taking ‘Hostages’

“I am not for holding up any money; I am not for taking any hostages here,” said Cantor, who last week said increases in disaster relief must be offset by spending cuts elsewhere. Cantor noted that the epicenter of an Aug. 23 earthquake was in his Virginia congressional district and, that some of his constituents are still recovering from Hurricane Irene.

Senate Majority Leader Harry Reid, a Nevada Democrat, said he would push a freestanding measure to provide disaster aid. Cantor, in a statement issued after Reid spoke, said he wanted details of the Senate leader’s request. Cantor said he hoped “we can work quickly and responsibly to provide any funding needed immediately.”

The Obama administration is conducting “an active discussion” about whether to ask Congress for more money to help communities hard hit by natural disasters this year, Homeland Security Secretary Janet Napolitano said.

“We have to help people get back in their homes,’” she said in an interview. “We need to rebuild communities, rebuild schools, fire stations and city halls.”

The Republican leader also said he would be open to extending unemployment benefits set to expire at year’s end if they are accompanied by changes in the system. He cited the Georgia Works program that combines jobless benefits and training to help idled workers find employment as a possible model.

To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net

To contact the editor responsible for this story: Laurie Asseo at lasseo1@bloomberg.net

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