Republican Senator Bob Corker
A senior Republican senator voiced confidence on Sunday that U.S. lawmakers would forge a deal on the year-end "fiscal cliff," while a top aide to President Barack Obama signalled a willingness to compromise over raising tax rates on the rich.
According to Reuters, Republican Senator Bob Corker said increasing tax revenues from wealthier Americans would have to be part of the plan, but he stressed closing loopholes rather than raising top tax rates as many Democrats favour, provided spending is also tackled.
"I am optimistic," Corker told "Fox News Sunday." "I think there is the basis for the deal. ... There is a way of getting there on the revenue side. The real question is: can we come to terms on the entitlement side?"
Obama has invited congressional leaders to the White House on Friday to discuss the issue, with only 50 days left until the end of the year. Unless Congress acts first, $600 billion in tax hikes and automatic federal spending cuts would take effect at the end of December, with a potentially devastating impact on the economy.
The Obama administration and congressional leaders are attempting to negotiate a deal to avoid the fiscal cliff, and instead work toward a deficit-reduction package in the next session of Congress that begins in January.
Top Obama aide David Axelrod, asked if it was possible to raise enough revenue to curb the deficit without increasing the top tax rate, praised the "encouraging" remarks by Speaker of the House of Representatives John Boehner, the top Republican in Congress, on the need to tackle the problem.
"Obviously, there is money to be gained by closing some of these loopholes and applying them to deficit reduction," Axelrod told CBS's "Face the Nation." "So I think there are a lot of ways to skin this cat, so long as everybody comes with a positive, constructive attitude toward the task."
Boehner last week repeated his party's commitment to not raise anyone's tax rates, but said that he would be open to a compromise that includes changes in the tax code that bring in more revenue, something fiscal conservatives in his party have argued strongly against in the past as tantamount to a tax hike.
Tax cuts first put in place under Republican former President George W. Bush are due to expire at the end of the year for all Americans unless Congress acts. That would lift the top rate of income tax from the current 35 percent for households earning more than $250,000 a year to 39.6 percent.
Obama won re-election on Tuesday after a campaign in which he called for wealthier Americans to pay a bit more in taxes. But a range of deductions, including on mortgage interest payments and charitable giving, can significantly lower the effective tax rate that most affluent U.S. households pay.