This is a rush transcript from "Your World With Neil Cavuto," September 3, 2010. This copy may not be in its final form and may be updated.
STUART VARNEY, GUEST HOST: And Congressman Gerry Connolly is on the phone now.
Congressman, I just told our audience that you are going to be campaigning this weekend. You don't want to raise taxes on the rich come January the 1st. You will have DNC Chair Tim Kaine with you. I'm suggesting that there is quite a big bloc of Democrats who do not want to raise taxes come January the 1st.
REP. GERRY CONNOLLY, D-VA.: I am here. Well, Stuart, I -- if you are right, that's news to me, because I can tell you that I have been sort of saying this since early this year. It is not an election-year conversion. I have made the economic argument that raising taxes right now, which is effectively what you do when you allow the tax cuts to expire, I think, does real damage to a very fragile economic recovery. And that's how we ought to look at it.
VARNEY: But it's a direct split with the president.
VARNEY: You and several leading Democrats, that's a flat-out split with President Obama.
CONNOLLY: Yes, it is. And it's a flat-out split with the Democratic leadership in the House of Representatives, which has steadfastly insisted that these tax rate cuts ought to expire on the upper-income brackets.
VARNEY: So, you're in fact running against the leadership of your party. Can you -- can you give me any numbers on how many other congressmen feel the same way?
CONNOLLY: Earlier this year, The Wall Street Journal only cited six of us in the House. I think that number now is larger today.
And I am hopeful that many of my Democratic colleagues will put aside sort of ideology and look at the economics of this. And, again, to me, this is a matter of timing and economic management. It is not a matter of ideology.
You know, you just had Karl Rove on. And Karl Rove...
CONNOLLY: ... certainly believes, ideologically, that tax cuts are always a good thing. I don't believe that.
But I believe, right now, to increase taxes on anybody, especially an income bracket that -- that is responsible for such a large percentage of our consumption in America, would be, not only unwise, but directly damaging to a fragile recovery.
VARNEY: So, flat-out, you are saying extend all of the Bush tax cuts?
CONNOLLY: For now.
VARNEY: For now.
VARNEY: Now, what kind of time frame will you put on that?
CONNOLLY: You know, I -- Stuart, I think we need to remain flexible and see what happens to the economy. If the economy was growing at 5.6 percent in -- you know, as of December 31, it is now growing at the rate of 1.6 percent.
So, you know, we have got to see -- we have got to give it time to recover from the steepest recession in 80 years.
VARNEY: But, you know, what you are saying is really -- I'm not going to say revolutionary, but it is a revelation. It amounts to a revolt within the Democrat Party against your party leadership and against your president.
CONNOLLY: Stuart, I know that you want to respect my party, so you will refer to it correctly as the Democratic Party, not the Democrat Party.
VARNEY: What's the difference?
VARNEY: Democratic is an adjective, isn't it? I...
CONNOLLY: Well, no, that is the name of our party, Democratic Party. That is how we want to be called.
VARNEY: OK, sir.
CONNOLLY: You are the fair and balanced network.
CONNOLLY: But, yes, I'm -- I -- I respectfully disagree with the prevailing ideology of my party.
I just think you have got to take cognizance of the economic -- the state of the economy. And I absolutely believe that, if you allow these tax rates right now to expire, you will bring down the rate of economic growth by at least half-a-percent.
VARNEY: At the end of the day, do you think you have got enough strength within your party, combined with the Republicans, to make sure taxes do not go up for anybody on January the 1st? Have you got the strength?
CONNOLLY: I think we are gathering strength. I don't think we are there yet.