* Looming tax, spending deadlines at year's end
* Action unlikely until after Nov. 6 election
* Bipartisan group working on deal to forestall crisis
By Kim Dixon
WASHINGTON, May 27 (Reuters) - Two respected former U.S. lawmakers whose names have become synonymous with bipartisan compromise in a highly divisive Congress are meeting with dozens of lawmakers to forestall a potential year-end fiscal crisis dubbed "taxmageddon."
Former Democratic White House chief of staff Erskine Bowles said he and former Republican Senator Alan Simpson, are working with a bipartisan group of 47 Senators and as many House members to frame a compromise on $7 trillion in looming fiscal decisions, Bowles said on CNN's news program, "Fareed Zakaria GPS."
Without a deal, the end of the year brings higher taxes for most Americans with the expiration of historically low income tax rates enjoyed by nearly every American and expiry of a payroll tax break, along with broad automatic spending cuts that most lawmakers in both parties want to avoid.
"I believe this group will come together during the lame duck," after the Nov. 6 elections, said Bowles, in reference to the congressional session that occurs after an election but before the new members have been sworn in.
Bowles co-chaired a presidential commission on reducing the federal deficit with Simpson that failed to win enough support to move forward, but which is held up by many moderates as a model for a potential deal.
"I believe the markets will force us," to come to a deal, Bowles said.
Bowles was White House chief of staff from 1996-98 under Democratic President Bill Clinton and Simpson was a Republican Senator from Wyoming from 1979 to 1997.
A stalemate over the issue could push the country briefly back into recession, the Congressional Budget Office said last week.
Goldman Sachs estimates that failure to reach a deal could shave about 4 percentage points from Gross Domestic Product in the first half of next year if lawmakers fail to reach a deal.
"If you want to be a purist, go somewhere on a mountaintop and praise the east," Simpson said. "If you want to be in politics you learn to compromise."
Lawmakers are not likely to tackle the issues until after the November presidential and congressional elections.
Bowles said he envisioned a two-step process that includes a framework and a timeline to force action. Republican House Speaker John Boehner suggested a similar path earlier this month.
The United States has run budget deficits topping $1 trillion for three straight years, and it is on course to do so for a fourth.
For more on the U.S. fiscal deadlines: