A top Senate Democratic aide, speaking on condition of anonymity, said late Tuesday that the recent discussions between the President and congressional leaders had left all parties and their staffs feeling newly optimistic about the trajectory of negotiations. President Obama had offered House Speaker John Boehner (R-OH) over the weekend a slightly pared back deal -- $1.4 trillion in new revenues, down from his initial ask of $1.6 trillion; and some additional spending cuts, which the aide did not enumerate.
Democrats waited for the GOP response, and Tuesday morning they got one when Boehner opened proceedings on the House floor by criticizing the President for not offering up sufficient cuts to domestic spending, meaning to programs like Medicare, Medicaid and Social Security. In short, no deal.
Whether based on speculation or genuine intelligence, Senate Majority Leader Harry Reid (D-NV) suggested to reporters at his weekly press briefing later in the day that a deal might be at hand -- if Boehner were not running into serious resistance from his top lieutenants.
"I don't know how valid it is," Reid said. "I just got a message here that there's a battle going on between McCarthy and Ryan and the majority leader in the House ... and Boehner."
Kevin McCarthy is the House majority whip; Paul Ryan is the chairman of the House Budget Committee; and Eric Cantor is the House majority leader.
Reid added, "Boehner's having trouble finding help from his leadership as to what they're to do."
A Boehner spokesman flatly rejected Reid's remarks, and the broader characterization of the negotiations.
Boehner, meanwhile, provided the White House a counteroffer that "would achieve tax and entitlement reform to solve our looming debt crisis," but did not provide any details. The White House didn't immediately respond to a request late Tuesday for comment on the details of Boehner's plan, or whether the President views it as a credible offer. But Obama and Boehner did speak by phone Tuesday evening, and staffs have returned to radio silence, suggesting parties are still hopeful for a deal.
But conceding income tax rates in negotiations with Obama as a predicate for broader negotiations remains a thorny issue for Republicans, and the Democratic aide said there's a strong likelihood that if the negotiations don't yield a result, the House will pass Senate legislation to extend middle income tax rates, allowing the Bush tax cuts for top earners to expire, as they are already scheduled to do by law. Because the House and Senate differ dramatically over whether and how to head off the sequester, it would take effect at the beginning of January. Lawmakers would then have about two months to reach an amicable solution that includes more tax revenue and more spending cuts before the debt limit would have to be raised.
The likely outcome of those future negotiations is deeply uncertain. A large number of Republicans would like to replay the debt limit fight of 2011, while Democrats are adamant that deal or no deal, Republicans will have to raise the debt limit without using it as a bargaining chip, or as a lever to force cuts to entitlement benefits.
And Senate Democrats aren't the only people on Capitol Hill preparing for this contingency. Shortly after news of the recent negotiations leaked, Sen. Bob Corker (R-TN) painted the same scenario on the Senate floor.
"It appears to me that it's very possible that we may move through the end of this year only dealing with rescuing the 98 percent of the people that have been caught up in this debate," Corker said. "I hate to use this word, but there's another moment coming which probably will force us to deal with this issue in other ways and that is the debt ceiling. And while I don't think it's mature that we have to have a line in the sand to force us to sit down and deal with this issue, it is where we find ourselves in this Congress and in dealing with this White House and that is needing a point of leverage to focus these discussions."