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Biden and Cantor have apparently developed a solid working relationship, and their approach could represent a middle road between Obama's "Grand Bargain" and a short-term debt extension.
Cantor spokesman Brad Dayspring said in a statement, "As Eric has said for weeks, tax increases that the Democrats are insisting upon cannot pass the House and are the last thing Congress should be doing with so many people out of work. Eric has always believed the Biden group identified between $2 and 2.5 trillion in spending cuts that could represent the framework for an agreement."
As for Boehner backtracking from his previous position that a bigger deal in the $4 trillion range was doable, a Republican familiar with the discussions said that taxes and entitlement cuts both became sticking points. The two sides could not agree on the core elements of a tax reform package sought by Boehner, and remained apart on what to do in the medium and long-term structural reforms.
Boehner now believes a smaller package, potentially one built on spending cuts identified through the talks led Biden may be the more likely vehicle for moving forward.
The smaller package would still have to exceed the size of the debt limit increase — expected to be at least $2.4 trillion.
Taxes had been at the heart of the negotiations since the beginning, with Republicans demanding that any new tax revenue be offset by tax cuts somewhere else. According to the Republican source, Boehner would only support increased revenue if it came from economic growth resulting from tax reform efficiencies in the economy, not from changes in the tax code itself.
Boehner also demanded a trigger that would mandate deep spending cuts if a tax reform package was not enacted by the end of this year.
Democrats quickly criticized Boehner for what they described as the GOP's insistence on protecting the wealthy from bearing any burden of reducing the deficit.
Senate Majority Leader Harry Reid (D-Nev.) issued a statement saying he was "disappointed that Republicans are unable to work with us to take a historic step forward that would have dramatically reduced our long-term deficit."
But Reid expressed confidence that a debt deal is still within reach: "We asked Republicans to consider a balanced approach that would have required shared sacrifice, but they would not. We still need to make sure we avert the economic catastrophe that would occur if we were to let America fail to pay its bills for the first time in our history, and I am confident that we will. Americans have a right to expect their leaders to rise above partisanship and do the right thing for our economy and the middle class."
Rep. Chris Van Hollen (D-Md.), who participated in the earlier Biden talks, was more frank.
"It's disappointing that the Republican fixation with protecting tax breaks for corporate special interests and the very wealthy prevented them from agreeing to a balanced and broad deficit reduction plan to help our economy and our country," said Van Hollen.