July 7th, 2011
10:33 AM ET
Washington (CNN) - The President and Speaker Boehner have discussed a potential compromise that includes broad tax reform and entitlement reform, putting all three entitlement programs (Social Security, Medicare and Medicaid) on the table, according to a Republican source familiar with negotiations.
The tax reform proposal discussed is to reduce the individual and corporate rates and simplify the tax code, eliminating deductions/credits/loopholes that corporations and individuals currently use to vastly reduce what they pay in taxes. This broad reform might appeal to Republican critics like Sen. Minority Leader Mitch McConnell who warned against “cherry-picking” certain tax loopholes to close instead of dealing with them separately as part of a comprehensive approach to tax reform.
The Republican source also stresses there has been no offer, no deal and this is just a discussion between the President and Speaker, and does not expect any agreement to come out of talks today.
This Republican source tells CNN a mechanism could be inserted in the agreement whereby if Democrats and Republicans don’t come to a deal in the time specified, then the Treasury Department would have the authority to intervene in such a way that it is distasteful to both Democrats and Republicans, enough to incentivize them to strike a deal.