WASHINGTON — Members of Congress need to suspend their political squeamishness on tax increases and allow the Bush-era tax cuts to expire in 2012 if they are serious about federal deficit reform, a research group reported Thursday.

The expiration of the tax cuts would likely boost demand for municipal bonds, according to market sources. Part of the weakness in the muni market since the beginning of the year stems from the Congress’ two-year extension of Bush tax cuts in December, they said. The tax cuts were initially enacted in 2001 and 2003.

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