Tags: Fiscal Cliff | Bowles | 40% | deal

Erskine Bowles: 40% Chance of Cliff Deal by Year-End

Monday, 10 Dec 2012 09:32 AM

The United States stands a 40 percent chance of seeing Congress and the White House steer the economy away from a fiscal cliff by the end of this year, said Erskine Bowles, co-chair of the National Commission on Fiscal Responsibility and Reform.

However, the country also stands a 35 percent the chance of going over the cliff, a combination of tax hikes and spending cuts due to take effect at the end of this year, and there is a 25 percent chance of getting a deal struck in early January.

"There's a 40 percent chance of a fiscal cliff deal before year end," Bowles told CNBC.

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"The chances of getting it done are better and that's what's key."

One hurdle standing between Washington and the other side of the cliff lies in taxes, with Democrats arguing for tax hikes on wealthier Americans to drum up revenues and Republicans countering with extending tax breaks for everyone but closing loopholes.

Some Republicans have said they'll come out in favor of hiking taxes on top U.S. earners if it means getting a deal done before the cliff arrives.

"I think if [both sides] agree on higher rates in some form, you'll see some of these other dominos fall into place really quickly," Bowles told the network.

Several Democrats — including Treasury Secretary Tim Geithner and former presidential hopeful Howard Dean — have said they'd be willing to see the country go over the fiscal cliff to force quick action on fiscal reforms that include tax hikes.

Lately, some Republicans feel President Barack Obama will get his way when it comes to raising taxes on wealthier Americans as part of a broader package to drum up fresh government revenues and narrow deficits, and have suggested following suit if it means seeing spending cuts take place elsewhere.

"Let's face it. He does have the upper hand on taxes. You have to pass something to keep it from happening," Sen. Bob Corker, R-Tenn., told "FOX News Sunday."

Others echoed similar sentiments in hopes they'll gain concessions elsewhere.

"[W]ill I accept a tax increase as a part of a deal to actually solve our problems? Yes," Sen. Tom Coburn, R-Okla., told ABC's "This Week."

Editor's Note: The Final Turning Predicted for America. See Proof.

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