Tim Geithner, the Treasury secretary, said there was a “reasonable chance” of the US finding a consensus on corporate tax reform, as he faced questioning from lawmakers that focused on the raging battle over fiscal policy.
Mr Geithner said it was “worth taking a run” at an overhaul of the way the US taxes business, in order to lower the current top rate of 35 per cent, which many economists and corporate leaders believe puts the US at a competitive disadvantage.
However, the White House has also said it would like to ensure that any reform does not add to US budget deficits, which would mean eliminating several large tax breaks that reduce the effective levy paid by many companies.
The Obama administration has not put forward its own plan for tax reform but officials have been studying the issue, along with staff at the relevant committees in Congress.
At a hearing in the House of Representatives, Mr Geithner faced a grilling from lawmakers on US fiscal policy, amid charges that the White House has been too timid in laying out a path to redress public finances.
“It is absolutely imperative that we find a bipartisan solution to bring down our deficits dramatically,” Mr Geithner said.
Some Republicans have argued that deeper spending cuts and more aggressive measures to tackle entitlements programmes such as Medicare and Medicaid need to be approved before the congressionally mandated US borrowing limit is increased above its level of $14,300bn.
However, Mr Geithner said there was no alternative to raising the debt ceiling, which will be reached between April 15 and May 31, according to Treasury estimates.
If authority to borrow more money is not granted to the Treasury, the US could potentially default, which might lead to turmoil in international capital markets.