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Boehner Withdrawal Sparks Scrambled Effort to Avoid Default

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"A deal was never reached, and was never really close," Boehner wrote in a "Dear Colleague" letter distributed Friday evening to his Conference. "The president is emphatic that taxes have to be raised."

"The president is adamant that we cannot make fundamental changes to our entitlement programs," Boehner's letter continued. "For these reasons I have decided to end discussions with the White House and begin conversations with the leaders of the Senate in an effort to find a path forward."

Boehner phoned Obama around 5:30 p.m. to inform him he was stepping away from the talks. In his briefing with reporters, Obama said he "couldn't get a phone call returned" all day from the Speaker.

A White House official told Roll Call that Obama had tried twice to reach Boehner once Thursday night and again during the day Friday. The president's message was that the group was "very close" to a deal and that he was "open" to an agreement, the official said.

The official also said that one sticking point was over Obama's health care law, with Republicans wanting to write in a repeal of the individual mandate, something that Obama believed was a "totally extraneous" issue and a "non-starter."

Boehner's characterization that the president was unwilling to budge on entitlements, however, did not seem to jive with the numbers released by both sides about changes Obama had put on the table for Medicare, Medicaid and Social Security. And an aide close to the "gang of six," pushed back immediately on the Republican charge that the dynamics of the group had altered the conversation. "Boehner has been briefed on this from the start and knew what was coming on Tuesday and what to expect with the Gang," the aide said, citing constant conversations between the Republican leader and close friend Sen. Saxby Chambliss (R-Ga.) since April.

Boehner had been working since last week with the Obama administration, beginning with a meeting last Friday with Treasury Secretary Timothy Geithner and White House Chief of Staff William Daley, to close in on a "grand bargain" worth $3 trillion to $3.5 trillion, GOP aides said.

GOP aides said that Boehner and the White House were settling on a tax reform revenue ceiling of $36.2 trillion over 10 years, with agreement on principals attached to the reform in the individual side in three rates, with the top rate being less than it was in 2011. The aides indicated that the White House then wanted a "higher revenue target, not a ceiling" after Tuesday's unveiling of the bipartisan gang of six plan, which included higher revenues than being negotiated and had been garnering GOP support.

Another sticking point had been the trigger to raise the debt ceiling for a second time, as the framework being negotiated was a "two-step process" that would extend the debt ceiling through February or March, leaving "requisite time" for committees to work on legislation to generate more deficit reduction, according to the aides. The first step would have raised the limit, imposed discretionary caps and installed a reconciliation-like process between the two chambers. Republican aides say Obama did not want the second date alone to be the "default position" trigger, so both sides sought to create an "equal political position."

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