Major Setbacks in Fiscal Cliff Negotiations

Both sides tell me talks between the White House and House Republicans have been significantly set back over the past 24 hours.

As they say, the darkest hour is before the dawn, but this is looking pretty grim.

A top aide to Speaker Boehner describes the White House's latest offer presented by Secretary Geithner today as "completely unrealistic" and "a break with reality."

And a top Democratic aide says, "The Republicans have taken to screaming at us."

And sources familiar with the call last night between Boehner and Obama - which lasted 30 minutes - as "unproductive" and "blunt." One source said the president did most of the taking: explaining why he will insist that tax rates go up.

Democrats are blaming Republicans.

" "Right now, the only thing preventing us from reaching a deal that averts the fiscal cliff and avoids a tax hike on 98 percent of Americans is the refusal of Congressional Republicans to ask the very wealthiest individuals to pay higher tax rates," said White House spokesman Josh Earnest. "The President has already signed into law over $1 trillion in spending cuts and we remain willing to do tough things to compromise, and it's time for Republicans in Washington to join the chorus of other voices - from the business community to middle class Americans across the country - who support a balanced approach that asks more from the wealthiest Americans."

Republicans, meanwhile, are blaming Democrats. Below is a read-out from a Congressional Republican aide on the latest White House proposal:

We've offered a "balanced" approach to deal with the fiscal cliff: raising revenue in a way that protects jobs while cutting spending. But, after two weeks of discussions, the offer the White House made today is completely unbalanced and unreasonable, and amounts to little more than reiterating the President's budget request - which failed to get a single vote in the House or Senate.

Why is it unrealistic:

1) Earlier this year, the Senate passed a tax bill with 51 votes, after a full-bore lobbying campaign by the White House. That bill - which the White House has constantly been calling on Congress to pass - would raise approximately $800 billion in additional tax revenue. The White House offer today called for nearly twice that amount of tax revenue, including plenty of rate hikes. While $1.6 trillion is the White House's public position, it is ridiculous to offer that amount two weeks after negotiations began - and less than a month before we must have a solution. Why on Earth would the White House think the Senate would or could pass a bill with DOUBLE that amount in tax hikes? (let alone the House?)

2) The White House keeps saying it wants a 'balanced approach' but this offer is completely unbalanced and unrealistic. It calls for $1.6 trillion in tax hikes - all of that upfront - in exchange for only $400 billion in spending cuts that come later. Plus, the only entitlement changes they proposed come from the exact proposals in the President's budget.

3) They also want a permanent, unlimited debt limit increase - for free. No additional cuts or reforms. Not to mention a host of other, unrelated White House proposals - including even more 'stimulus' spending.

This offer represents a complete break from reality. There were only seven weeks between election day and Christmas. The White House has now completely wasted three of them. After weeks of negotiations, they just demanded all of their favorite proposals, with no sign of compromise whatsoever.