President Barack Obama and Speaker of the House John Boehner are reportedly near reaching a $3 trillion deficit reduction deal including limited, if any revenue increases.

While both sides have denied an agreement is in the works, congressional Democrats are — in the words of Sen. Barbara Mikulski (D-MD) —"volcanic" that a deal without revenues is being seriously considered.

Senate Majority Leader Harry Reid (D-NV) said of the reported deal: "There has to be some fairness to this. This can't be all cuts. There has to be balance."

According to congressional sources the agreement would include approximately $3 trillion in spending cuts, while including painful incentives to reform the tax code. Obama has demanded that the tax system be overhauled by the end 2012, or else the Bush tax cuts would expire; while Boehner is pushing for the repeal of the "individual mandate" in the health care reform law passed last year if no agreement on taxes is reached, The New York Times reports.

If an agreement as described does materialize, it would be a major victory for both Boehner and Obama — which is why it might not pass.

For Boehner these terms are a no-brainer, with no new taxes immediately, and Republicans off the hook for causing a global economic collapse. For Obama, it's a deal — and any deal is a win. But it's also more substantial than a simple debt limit increase or just token spending cuts, giving him an accomplishment to take into the 2012 election.

But Democrats have wagered everything on a "balanced" approach including significant revenue increases. With Boehner able to take credit in Congress for reaching a deal with Obama that includes no new taxes, Democrats will have nothing to hang their hats on.

Reid and House Minority Leader Nancy Pelosi have said they won't back a proposal that doesn't include new revenues, though it is unclear whether they will be persuaded to accept one including the promise of tax reforms next year.

In order to get an agreement through the Democrat-controlled Senate Obama will have no choice but to crack some heads, and hope no one filibusters the deal. (There may not be 60-votes for it.)

Obama summoned the Democratic leadership to the White House Thursday evening to discuss the proposal, while Boehner is expected to brief his caucus on it Friday morning.

The leaders are hoping that given the opportunity, leaders of both parties will embrace the opportunity to produce historic reforms from their as yet do-nothing Congress.