• With: Rep. Tom Cole, R-Okla.

    This is a rush transcript from "Your World," November 28, 2012. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST OF "YOUR WORLD": Take that 98 percent deal right now and deal with tax rate hikes on the rich later?

    That is not a Democrat talking. That is Republican Congressman Tom Cole, who is talking to us right now.

    Welcome, everybody. I'm Neil Cavuto coming to you live from sunny California. It's the tax capital of the nation, by the way, and if Democrats and at least one Republican have things their way, taxes could soon be going even higher for couples earning north of $250,000 a year, maybe a lot higher.

    That's because Republican Congressman Tom Cole says we ought to freeze tax rates at the current levels for the majority of Americans just in time for Christmas and deal with the top 2 percent who likely see their rates raised later. That triggering this reaction today from House Speaker John Boehner.

    (BEGIN VIDEO CLIP)

    REP. JOHN BOEHNER, R-OHIO: I told Tom earlier in our conference meeting that I disagreed with him. You are not going to grow the economy if you raise tax rates on the top two rates. It will hurt small businesses. It will hurt our economy. That is why this is not the right approach.

    (END VIDEO CLIP)

    CAVUTO: Now to the guy at the center of the tax storm, Oklahoma Republican Congressman Tom Cole in a first on Fox.

    Congressman, he singled you out for calling you out. How do you feel about that?

    REP. TOM COLE, R-OKLA.: Hey, look, I like the speaker. We have a great relationship and we are able to talk directly and honestly with one another, so I have no problem with that. And I would expect him to express his opinion, just as he would expect me to express mine.

    CAVUTO: I think what he is saying is you are pre-caving.

    COLE: No, that is just nonsense.

    The reality is tax rates go up for every American on December 31. If we can make sure that doesn't happen for 98 percent of them and continue to fight for the other 2 percent, I think that makes a lot of sense. I actually think the American people will listen to us in that discussion if they know their taxes aren't going up. And I think that we will win the argument.

    I really do believe most people understand raising tax rates is bad for the economy, it costs jobs. It actually in the long term undermines revenue. But, right now, everyone's taxes are scheduled to go up. And unless we fix that, paradoxically, President Obama becomes a defender of the Bush tax cuts for 98 percent of the people. And he's no such thing. That is something we accomplished and we ought to take pride in. Again, I am not for raising rates on anybody, period.

    (CROSSTALK)

    CAVUTO: But we know the end result will be -- you mentioned the president, sir, and he seized on your remarks as well. This is from President Obama earlier.

    (BEGIN VIDEO CLIP)

    PRESIDENT OBAMA: I'm glad to see if you have been reading the papers lately that more and more Republicans in Congress seem to be agreeing with this idea that we should have a balanced approach.

    So, if both parties agree we shouldn't raise taxes on middle-class families, let's begin our work with where we agree.

    (END VIDEO CLIP)

    CAVUTO: You have the president agreeing with what you're saying, congressman, the speaker not.

    (CROSSTALK)

    CAVUTO: Where do you see this...?

    (CROSSTALK)

    COLE: I don't think rates on anybody should go up. I'm against tax increases on anyone, period, end of debate.

    But it doesn't take a positive action by Congress to raise taxes. These taxes are going up unless we do something to stop it. If I can stop them for 98 percent of the people and then continue to fight on the others, I will. If you think we are going to gain ground by holding the American people hostage, saying that their taxes are at risk, I actually disagree.

    That is not our leverage in this debate and discussion. It is the president's. But, look, I respect the speaker. I support the speaker. I supported him on any tough vote that he's had. He can negotiate a great and better deal, and I know he is trying to and I think he's got a chance of doing it. He will certainly have my support.

    But this was a comment made, by the way, in off-the-record whip conversation. They asked me, what do you think? I said this is what I think. It was leaked. That's fine. And I am quite happy to defend my position, but it's not as if I am working against the speaker or conference. Quite the opposite.

    CAVUTO: You don't think there is a division in the ranks, Congressman? By that, I mean that Republicans seem to be kind of twisted and torn now that if they go along with pushing very hard for rates not to go up for the upper income, they do risk as you pointed out having rates go up for everyone.

    So I understand what you're saying. Address it so that it doesn't happen at least to the 98 percent. But do you think that it would be even be likely that in the new Congress, you could correct things for the 2 percent for whom rates would go up? Wouldn't it be...?

    (CROSSTALK)

    COLE: Yes, I do believe you can correct things.

    But again I don't think if you allow the Democrats to pose as the defenders for tax cuts, by the way, they almost all opposed in the first place. We ought to recognize, this is getting and making permanent 80 percent of the Bush tax cuts for 98 percent of the American people, and that is a victory, not a loss.

    And then we are still free to continue to pursue it because their policy is -- the president's policy is bad policy. It will raise rates, it will hurt the economy, it will cause less investment and fewer jobs. We can win that argument.

    But if we try to make it while most Americans suspect that we might be complicit in raising their taxes, I think we are more likely to lose. So again that that is just my -- we don't have a debate here over political theology. It's a debate over political tactics.

    CAVUTO: Always, congressman, a pleasure. Thank you very, very much.

    COLE: Thank you, Neil.

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