"Because the American people expect us to find common ground, we are willing to accept some additional revenues, via tax reform," House Speaker John Boehner said in the Capitol Wednesday -- his first major address since Tuesday's election. "But the American people also expect us to solve the problem. And for that reason, in order to garner Republican support for new revenues, the president must be willing to reduce spending and shore up the entitlement programs that are the primary drivers of our debt."
As a model, Boehner cited a revenue neutral 1986 tax reform initiative spearheaded by President Reagan and Speaker Tip O'Neil. Top Democrats, including Sen. Chuck Schumer (D-NY), have loudly rejected that framework, arguing that it raises too little revenue to address medium-term fiscal imbalances, and lets wealthy people off the hook for drawing down budget deficits.
That leaves a yawning chasm between the parties, which cannot be bridged unless the Democrats soften their demands, or Republicans figure out a way to assure the tax reforms they are proposing raise significant revenue on their own -- without relying on dubious projections of ensuing economic growth -- and that it's taken largely from top earners.
Aware of the leverage that the expiring Bush tax cuts provide Democrats, one Senate leadership aide warned that if Republicans don't allow the tax rates on top earners to expire, they'll push the country off the fiscal cliff.
And Republicans aren't ready to go there.
"There is no mandate for raising tax rates on the American people," House Majority Leader Eric Cantor said Wednesday in an official statement that again stressed the GOP's opposition to higher tax rates. "There is a mandate for avoiding the fiscal cliff and finding real solutions so we can make life work for people again. Higher tax rates won't create jobs."