Parties Begin Staking Out Ground For a Deficit Deal

Stars may be aligning for politicians to get real on deficit-reduction.

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Beating back K Street—the Washington home to lobbyists representing groups who currently profit from the tax loopholes—is not something Washington politicians are best known for.

"It is a huge, huge, huge undertaking. You cannot imagine the money that's going to be spent on K Street by K Street to try to make sure that whatever group they represent doesn't get screwed," Haskins says. But, he adds, "That's the only way to do it. And we've done it before—we did it in 1986. So it's possible."

The last time major federal tax reform was achieved was in 1986 when President Ronald Reagan, a Republican, and House Speaker Tip O'Neill, a Democrat, worked together to overhaul the system.

[Read Chatter on Vice Presidential Nominees Starting to Build.]

Further encouraging close observers that the my-way-or-the-highway times might be a-changing on the debt issue were comments made by House Minority Leader Nancy Pelosi on Thursday.

Pelosi, who previously denounced the bipartisan framework for deficit reduction outlined by the Simpson-Bowles Commission in part because of cuts to Medicare, announced matter of factly that she would vote in support of that very plan.

"I felt fully ready to vote for that myself, thought it was not even a controversial thing," she said during her weekly press briefing.

But it's still too early for cheerleaders of bipartisan compromise to wave their pompoms yet. House Speaker John Boehner, answering the same question, said, "I would be supporting the House Republican budget."

Steve Bell, senior director of economic policy at the Bipartisan Policy Center, said history reveals change will only come when lawmakers' backs are against the wall.

"I have to say, that the odds are they will kick most of these grenades down until the bond ratings agents decide to exact some punishment," he said.

And when is that expected?



Twitter: @rebekahmetzler