Many political analysts are arguing that the presidential race will lead to a compromise that might otherwise have been pushed back further. Elected officials and policy experts are beginning to see improving odds for an end of the year deal on tax and budget issues, specifically defense and domestic spending and the expiring Bush tax cuts.
According to this theory, there will be harsh debate from both candidates and their respective parties, but this will ultimately lead to compromise. In his New York Times article John Harwood argues that the breakthrough would be similar to the Simpson-Bowles compromise proposed in 2010. It is interesting that the fundamental positions and trade-offs haven’t changed in the two years of Congressional gridlock. If Harwood is right, we would see roughly $4 trillion in deficit reduction over 10 years. Republicans will inevitably have to accept some tax increases and Democrats would have to compromise with big changes in Medicare and other entitlement programs.
Look for the two presidential candidates to continue to attack each other about budgetary matters until Election Day, but that battle could ultimately alleviate Congressional gridlock, no matter who wins the presidential election.