Fiscal Cliff

Will Republicans Budge on Taxes if Obama Wins?

10.08.12 5:00 PM ET

#Slatepitch, I know. But the Financial Times thinks the GOP will have to seriously consider working with the re-elected president. And that's pretty important, considering the looming fiscal cliff.

“We’re not going to have that much leverage. We can try to leverage [the extension of Bush-era tax cuts for the wealthy], but you don’t want to use all your chips in the lame duck. You want to use them for actual, real legislation,” the House aide said. “You might actually give in on $250,000. I don’t know how, but you might.”

A top Republican aide in the Senate said that an overhaul of the US tax code was ultimately the most important tax-related goal of the party and that the intense focus on whether or not to increase taxes on the top earners was ultimately irrelevant.

The quietly changing sentiment diminishes the chances of the US dropping off the “fiscal cliff” in early 2013. Unless Congress takes action, the economy will be hit by a $600bn combination of tax hikes and spending cuts that are forecast to tip the country into a double-dip recession in the first months of next year