As noted in prior posts the critical sticking point on a grand bargain to put government finances on a sustainable path is the intransigence of House Republicans to agree to any tax increases. (Senate Republicans numerous times have signalled willingness to compromise on taxes.) The crystal clear refutation of this position by 80 prominent business leaders--the very folks Republicans are trying to steer tax benefits toward--leaves them isolated in post-election negotiations. As a result the chances now for a deal with the parameters ("including $2.50 in spending cuts for every $1 in higher revenue") recently outlined by the President (and was the core of the deal that collapsed in July 2011) have substantially improved. The two words in boldface from the letter are news and they make all the difference:
- [The deficit reduction plans should include] comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit.