And I don't just mean he might agree to extend all the Bush tax cuts, as he seems to be getting ready to do. A much bigger deal needs to be done--one that raises a lot more revenue in the medium and longer terms. You might say Republicans will never agree to this. I say it depends. I think the chances are less than 50%, but not zero, and the opportunity is worth pursuing. I spell it out in this new column for the FT.

Both parties have made a promise they will have to break - namely, to raise nobody's taxes (the Republicans' position) or almost nobody's (the Democrats'). Moreover, whatever they might say, both sides know they will have to renege. Spending cuts cannot balance the long-term budget. Tax increases limited to businesses and the rich cannot do it either.

The starting point for compromise is for each side to see that the other can cover its retreat from a fiscally untenable position. Let necessity be the mother of collaboration.

Next, each side must calculate that what it gains will make up for what it has to concede - that compromise on taxes, necessary to help the economy, will not hurt too much politically. This is the tricky part but, depending on the details of the tax-reform strategy, it can be done.