* 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 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
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
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 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
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
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: