Fundamentally, these 2 methods should have the same result (although in practice, tax cuts have had a bigger multiplier effect). So then I think it a matter of who you affect that becomes important. This deal can’t consist of 100% spending cuts (this is going to directly affect SS benefits, etc), and it shouldn’t consist of 100% tax increases of course, but it rather has to be some combination. So what’s the right mix? According to a Gallup poll, the average Republican voter wants a mix of 26% in tax increases & 74% in spending cuts, while the average democrat wants 46% & 54%, respectively.
Obama’s main proposal was a combination of ONLY 17% from tax increases (especially given upcoming elections and party dissatisfaction, this is a bold move but he wants to get a deal done). Yet 97% of House Republicans have signed and are sticking to a no tax pledge, rejecting the proposal. Honestly, who’s more at fault here in blocking a deal? The risk of default is too for nothing to get done though, so I believe (maybe too optimistically, that something will be agreed upon by Aug. 2nd. I would of course consider this my birthday present.
(President Obama falls somewhere between Republican voters and House republicans.)