House Republicans may give in to Democratic demands to raise tax rates for the wealthy to avoid an avalanche of tax increases and spending cuts that would kick in Jan. 1 unless a deal is struck.
Speaker John Boehner, R-Ohio, emerged from a closed-door meeting with House Republicans on Wednesday insisting that the party would never agree to President Obama's proposal to raise income taxes on those earning more than $250,000 annually.
But behind the scenes, the GOP leadership was asking members whether they would consider some kind of rate increase.
According to one GOP aide, a member of the Republican leadership on Wednesday approached Republican colleagues to ask "which tax increases members could most tolerate" in a deal to avert the massive tax increases and spending cuts, the so-called fiscal cliff, that economists threaten could damage the fragile economy.
The discussion about tax increases comes a day after Rep. Tom Cole, R-Okla., made the case privately to top GOP House lawmakers that it would be better for the party to back a compromise that at least extends the rates for the lower income earners before the end of the year.
"Few members of the GOP whip team disagreed with Rep. Cole," the Republican aide said.
If House Republicans agree to a tax rate increase, it would mark a stunning turnaround for the party, which has for years championed its stance against higher taxes.
The party, however, has already softened in its opposition to a general tax increase by agreeing to raise revenue by closing tax loopholes.
Republicans made the overture after the Nov. 6 election, in which they failed to win the Senate majority or the White House.
Now, a year-end deadline is looming, and members are feeling further pressure to approve a deal or risk taking the blame for across-the-board tax increases.
Obama has upped the pressure by declaring he would not sign legislation to avert the fiscal cliff if it does not raise rates on the top two income brackets, and he is taking his case to voters in a campaign-style event planned in Pennsylvania on Friday.
Boehner gave no indications publicly on Wednesday that he is ready for such a compromise. A top aide in his office denied that leadership is weighing whether to support a tax rate increase.
After some Republicans began talking publicly about breaking their no-tax pledges for the sake of a compromise, Boehner told his members in a closed-door meeting Wednesday not to buckle under the pressure, according to a participant.
"We are willing to put revenue on the table as long as we are not raising rates," Boehner said after the meeting.
But in a sign that a deal with tax increases may be in the works, the GOP leadership met with Erskine Bowles, a chief of staff to former President Clinton and co-author of a plan to eliminate the nation's debt with a mix of tax increases, spending cuts and entitlement program reforms.
"We are going to have to compromise," Bowles said on Capitol Hill. "We are going to have to have revenue, and we are going to have to have spending cuts. The only way you can do this is to have a balanced approach."