A '40% Chance' of Cliff Deal Before Year End: Bowles

Jay Mallin | Bloomberg | Getty Images

Erskine Bowles

Erskine Bowles, co-chair of President Barack Obama's 2010 debt commission, said he expects there is a better chance that a deal will get done to avert the so-called fiscal cliff.

"There's a 40 percent chance of a 'fiscal cliff' deal before year end," Bowles, told CNBC on "Squawk Box" on Monday. "The chances of getting it done are better and that's what's key."

But he still thinks there's a 35 percent chance of going over the cliff, which would trigger $600 billion in spending cuts and tax increases. He said there's a 25 percent chance of a deal being hashed out just after the new year.

While the president has "drawn a hard red line" on tax rate increases for the top 2 percent of wage earners, Bowles pointed out that Obama is showing a willingness to talk about broadening the tax base.

Obama and House Speaker John Boehner (R.-Ohio) met at the White House on Sunday to talk about ways to avoid the fiscal cliff. Their staffs say the lines of communications remain open.

Meanwhile, there's a growing belief among Republicans that they're going to have to give into White House demands for higher tax rates on the wealthy in order to push the ball forward on their agenda to overhaul government entitlement programs.

"I think if [both sides] agree on higher rates in some form, you'll see some of these other dominos fall into place really quickly," Bowles said to CNBC.

Bowles and his co-chair on the National Commission on Fiscal Responsibility and Reform Alan Simpson crafted the oft-cited Simpson-Bowles deficit reduction plan, which fell short of approval from the bipartisan panel back in 2010.

Former Republican Senator Simpson and he also co-founded the Fix the Debt campaign, which launched this past summer. The group describes itself as a non-partisan movement aimed at putting America on a better fiscal and economic path.

—By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC