With the opening of Asian markets now hours away and talks between Congressional leaders at a stand-still, ABC News has learned of a new high-stakes turn in the debt ceiling drama.
I am told that Speaker Boehner and President Obama are once again having back-channel talks on a large-scale deficit reduction plan that would include cuts to entitlement programs and increases in tax revenues.
Boehner and Obama are again negotiating a "grand bargain" deal to address the debt crisis with deep spending cuts. Treasury Secretary Tim Geithner just confirmed this in his pre-taped interview on "This Week."
Even if they can agree, however, the deal would face strong opposition for House Republicans opposed to increasing taxes and Democrats opposes to entitlement cuts.
As you recall, Boehner and the president were close to a deal that would have included $800 billion in higher tax revenue over the next 10 years. Those talks collapsed after Boehner pulled out Friday, saying President Obama was now demanding $1.2 trillion in tax revenue.
It now looks like the original framework is back in play – a deal with some $3 trillion in spending cuts and $800 billion in additional tax revenue.
One source described the talks as Boehner and the president “footsie” because the talks are indirect, and they are happening even as Boehner and the other Congressional leaders are attempting to negotiate a Plan B.
The latest development puts Speaker Boehner in his most precarious position yet: If President Obama accepts the original deal, how can he refuse him? But if Boehner accepts it, he is going to face a full-scale revolt from his own leadership team. I am told that Eric Cantor, Kevin McCarthy and Jeb Hensarling (the 2, 3, and 4 GOP leaders in the House) have all made it clear to Boehner they will not accept a deal that increases tax revenues by $800 billion.
If Boehner strikes such a deal with the president, he could lose more than 100 Republican votes in the House. It could ultimately cost him his Speakership. But it may be the only possible way to both avoid default and address the underlying debt crisis. The question is what it has always been: Could such a deal pass the House and Senate? Democrats won’t like it any more than Republicans, but a large number of Democratic votes would be necessary to pass it.
Tick, tock, tick, tock ….