‘A solution may be in sight’?

Updated
 
'A solution may be in sight'?
'A solution may be in sight'?
Associated Press

There’s ample reason to believe Democrats and Republicans will struggle to reach a deal on taxes before the end of the year. GOP congressional leaders have signaled little willingness to compromise, and there’s very little time to get an enormous amount of work done.

And yet, the relevant policymakers don’t seem especially worried. On the contrary, they seem cautiously optimistic. Senate Majority Leader Harry Reid (D-Nev.) told reporters today, “We have the cornerstones of being able to work something out.” House Minority Leader Nancy Pelosi (D-Calif.) added, “I feel confident that a solution may be in sight.”

Given that the parties agree on almost nothing, there have been no compromises, and looming deadlines appear daunting, how is this possible? Brian Beutler has a fascinating item on where things might be headed.

In a White House meeting with President Obama and other Congressional leaders Friday, House Speaker John Boehner traced a procedural path for reaching deficit reduction targets next year, while avoiding immediate, and deeper, budget tightening in January.

The outline, provided by Boehner’s staff, indicates that Republicans have conceded that they’ll have to meet President Obama’s call for significantly higher revenue. But it’s shy on details about where those revenues would come from and what concessions Republicans would require from Democrats in return.

An aide to the Speaker told Brian, “Since tax and entitlement reform are too complex to complete this year, the Speaker noted, our goal for this year, in the coming weeks, is to settle on long-term revenue targets for tax reform as well as targets for savings from our entitlement programs. Once we settle on those targets, the Speaker proposed, we can create simple mechanisms, in statute, that would achieve those revenue and spending goals. They would be in place unless or until more thoughtful policies replace them. The Speaker recalled the president’s call for a ‘balanced’ approach to the debt problem – a combination of revenues and spending cuts – and said the framework Republicans have proposed is consistent with it.”

In practical terms, this offers the participants something resembling a way out of their current mess.

Once the relevant players accept the fact that they’ll never strike a sweeping, bipartisan agreement on revenue, spending, entitlements, and tax reform over the course of one month in a lame-duck session, what’s left is a framework with a series of “targets” that the administration and Congress can work on in the next Congress.

All of the relevant details still need a lot of work, but keep an eye on this as a possible short-term resolution.

Debt and Fiscal Cliff

'A solution may be in sight'?

Updated