Why did the Obama-Boehner grand debt reduction deal fail?

UPDATE: President Obama, Vice President Joe Biden, and eight senior congressional leaders of both parties met for about 75 minutes Sunday evening at the White House. Nothing was settled regarding the federal deficit or debt reduction, but both sides agreed to meet again Monday afternoon. Sunday's meeting was described by Politico.com as "testy" with "several sharp and frustrated exchanges." Obama has scheduled a press conference for 11 am ET Monday.

The President of the United States and the Speaker of the United States House of Representatives. Two of the most powerful political leaders in the world. And yet as President Obama and Speaker John Boehner are finding out, there are clear and sometimes sharp limits to what they can accomplish.

As they prepare for their Sunday evening meeting at the White House, the grand plan for tackling the nation’s deficit and debt – a $4 trillion package over 10 years – has gone poof, reduced to perhaps half that amount.

Both leaders are under pressure from their own parties: Boehner from those on the right who refuse to accept any new revenues carrying the whiff of taxes, and Obama from those on the left who refuse to consider any cuts to such cherished entitlements as Social Security and Medicare.

An exchange of short statements Saturday evening tells the story.

Boehner: “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes…. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”

White House communications director Dan Pfeiffer replied: “The president believes that solving our fiscal problems is an economic imperative. But in order to do that, we cannot ask the middle-class and seniors to bear all the burden of higher costs and budget cuts…. We need a balanced approach that asks the very wealthiest and special interests to pay their fair share as well, and we believe the American people agree.”

The White House can cite some polling data for its position here.

“Two-thirds (67 percent) approve of making more of high earners’ income subject to Social Security tax, and nearly as many approve of raising taxes on incomes of over $250,000 (66 percent), reducing military commitments overseas (65 percent) and limiting tax deductions for large corporations (62 percent),” the Pew Research Center reported last month.

“Notably,” Pew found, “Republicans are as likely as Democrats to approve of limiting corporate tax deductions.”

Still, any kind of tax increases – whether it be a greater tax bite on the wealthy or on corporations seen as “job creators” – is off the table as far as large numbers of Republican House members are concerned.

So the fall-back position looks likely to be what Boehner was referring to – the bipartisan congressional discussions led by Vice President Joe Biden that had identified about $2 trillion in deficit reductions by cutting spending.

Election politics are strongly at play here – especially regarding Obama’s reelection bid.

His disapproval rating now matches his approval rating. One big reason: public economic optimism is now at its lowest point since July 2008, shortly before the financial crisis.

“The percentage saying they expect the economy to be better a year from now has fallen 13 points since April 2010 (from 42 percent to 29 percent) and is at the lowest point since Obama took office,” the Pew reports. And that was before Friday’s anemic jobs and unemployment figures for June were released.

At 6 pm Sunday, congressional leaders of both parties are scheduled to meet with Obama at the White House. The numbers they face are sobering: a $1.5 trillion budget deficit and a national debt that now exceeds the $14.3 trillion set by Congress. Closely related: a jobless figure that’s just edged up to 9.2 percent.

Meanwhile, the clock ticks toward the Treasury Department’s August 2 deadline for raising the debt limit.

"Failure is not an option," Treasury Secretary Tim Geithner said on CBS' Face the Nation. "The question is how good a deal it's going to be."