Democratic and Republican leadership aides said there is at least some initial optimism that a deal can be reached, given that both President Barack Obama and Speaker John A. Boehner offered olive branches last week in their initial post-election statements on the issue.
Beyond its effect on middle-income earners, a wide range of tax policy experts note several potentially unattractive consequences of a deduction cap. Many taxpayers could claim deductions for state and local tax and mortgage interest payments, which would shrink incentives for charitable deductions.
Sam Goldfarb contributed to this report.
An earlier version of this article misstated whom President Barack Obama said he wouldn't raise taxes on. Obama has said he won't raise taxes on those making less than $250,000.
Sen. Jeff Flake, R-Ariz., takes a selfie with his cut-out head during the Hoops for Youth 16th annual charity basketball game held at George Washington University's Smith Center, September 8, 2014. The members of Congress team beat the lobbyist team 46-40. Buy photo here.