Obama has criticized Romney for proposing a 20 percent cut in marginal tax rates, arguing it would either lead to higher federal deficits or to higher taxes for the middle class. But Hassett indicated that if Romney and Congress were unable to find enough savings by eliminating tax loopholes and breaks to cover the lost revenue, the tax cut would be adjusted so it wouldn't be so steep.
Obama officials say they are optimistic that they can reach a sweet spot of compromise that restrains deficits over time but is not so austere that it damages the recovery. Obama and his aides insist they will not simply buy time or agree to a short extension of all Bush-era tax cuts. Obama has said the election will help resolve the issue.
"I'm hoping that after the smoke clears and the election season's over that that spirit of cooperation comes more to the fore," the president told CBS' "60 Minutes" last week.
But Harris, the Bank of America Merrill Lynch economist, said the election may not prove a decisive factor on a debt compromise. That's because Romney has not specified what government spending or tax loopholes he intends to eliminate, and Obama has not offered details on what entitlement cuts he would undertake."The two parties are offering all sugar and no medicine solutions," Harris said. "Neither party comes out of the election with a clear mandate. You only have a mandate if you have specific proposals." The business sector is anxious â¿¿ and weighing in. Boeing chairman and CEO Jim McNerney told reporters in a conference call that chief executives "wouldn't be uncomfortable" with some tax increases if the overall package included larger spending cuts. He specifically cited a proposal by a commission headed former Republican Sen. Alan Simpson and Democrat Erskine Bowles that would provide $3 in spending cuts for every $1 in additional revenues.