There’s increasing skepticism in D.C. that a deal actually can be reached before Jan. 1, | AP Photos Cliff chaos: Hundreds of billions apart

The bellowing on Capitol Hill about which side has offered more “specifics” to resolve the fiscal cliff showdown masks a larger problem for Washington: The two sides are still hundreds of billions of dollars apart on revenue and entitlement cuts.

Not to mention, Republicans and Democrats are also light-years apart on policy details that back up those budget targets.


That’s why there’s increasing skepticism in Washington that a deal actually can be reached before Jan. 1, and the country will go over the fiscal cliff.

( PHOTOS: Fiscal cliff's key players)

The reality is the two sides are swapping proposals that do little but reaffirm the positions they’ve long held. And despite hopes for progress, the two sides seem to be diverging further, according to people involved in and familiar with the talks.

On Monday, the White House made an offer to House Speaker John Boehner (R-Ohio) calling for $1.4 trillion in new tax revenue — a small downtick from their original position of $1.6 trillion. Proposed cuts to entitlement programs like Medicare and Medicaid, sources said, stayed stuck around $600 billion. Democrats say Republicans must come to grip with tax-rate increases, and it will be smooth sailing from there.

( POLITICO's full fiscal cliff coverage)

As part of its offer, the White House committed to moving forward next year on corporate tax reform, according to a Democrat familiar with the talks.

The move on corporate tax rates — which came out as the influential Business Roundtable backed Obama on higher individual taxes on the wealthiest Americans — was first reported by the Wall Street Journal.

On Tuesday, Boehner then countered with his own offer — $800 billion in tax revenue, more than $1 trillion in spending cuts, according to sources.

Boehner’s spokesman subsequently called the White House statement on corporate tax reform “a red herring.”

“We’ve always said you need to do both, given the way they interact,” said Michael Steel. “The issue is the individual rates because of the small business jobs impact.”

Republicans are also still opposed to hiking the U.S. debt limit — or giving the president authority to do so on his own — in this package unless they get something drastic like dollar-for-dollar entitlement cuts to tax increases.

White House officials said that Obama and Boehner spoke on the phone on Tuesday, their third conversation in the past week.

Boehner’s new offer, coming only hours after he went to the House floor to bash Obama, was described by aides as a reaffirmation of the Republican position that doesn’t break dramatic new ground.

“We sent the White House a counteroffer that would achieve tax and entitlement reform to solve our looming debt crisis and create more American jobs,” Boehner spokesman Michael Steel said. “As the speaker said today, we’re still waiting for the White House to identify what spending cuts the president is willing to make as part of the ‘balanced approach’ he promised the American people. The longer the White House slow-walks this process, the closer our economy gets to the fiscal cliff.”

The huge ideological and policy gap between Obama and Boehner explains why, in recent days, the White House and House Republicans have shown they’re unlikely to budge off their respective barricades unless the prize is very rich.

The White House and GOP leaders are accusing each other of being unreasonable and willing to go over the cliff in order to score a political victory.

House Republicans don’t have a backup plan and have no immediate plans to bring legislation to the floor to make a political point, sources said.

Yet taxes and entitlement spending aren’t the only issues that need to be resolved. Deep spending cuts go into effect on Jan. 2, hitting the Pentagon and all federal agencies; unemployment insurance expires; the farm bill needs to be updated; and the alternative minimum tax needs to be patched.

Top Republicans involved in the talks have turned more sour in recent days. Almost all key aides think Obama is preparing to blame Republicans if no compromise is reached.

“In our view, $800 billion was a huge give. And we still have yet to see anything approaching that on the table,” said a senior GOP aide.

This source said the White House “is walking back” an earlier offer calling for smaller revenue gains from tax increases, but Democrats deny that has occurred.

“This is all about them creating a narrative that says Boehner walked away from a deal,” another Republican aide added. Another Republican said the White House “is just creating a paper trail” in order to blame GOP leaders if no agreement is reached.

The public jousting is increasing, as well. Boehner took to the House floor Tuesday morning to ask, “Where are the president’s spending cuts? … When is the president going to get serious?” Senate Minority Leader Mitch McConnell (R-Ky.) got into it, as well.

“The president seems to think that if all he talks about are taxes, and that’s all reporters write about, somehow the rest of us will magically forget that government spending is completely out of control and that he himself has been insisting on balance,” McConnell said in remarks on the Senate floor.

But White House spokesman Jay Carney shot back that Republicans know what they have to do to get a deal and are unwilling to do so.

“We do believe that the parameters of a compromise are pretty clear,” Carney told reporters on Tuesday. “What is required is … agreement by Republicans to some specific revenues that includes raising rates on the highest earners and some decisions made in the two-stage process that we put forward, and I think the Republicans agree on, on how we move forward on spending cuts and broader entitlement and tax reform.”

The latest back and forth paints a perilous picture for negotiations to solve the looming deadline.

Senate Majority Leader Harry Reid (D-Nev.), who often waxes skeptical about the prospects of legislation getting wrapped up at the end of the year, told reporters Tuesday that it would be “extremely difficult” for Congress to wrap up a deal before Christmas.

Reid also tried to cause problems for Boehner by suggesting that the Ohio Republican was having to fight off House Majority Leader Eric Cantor (R-Va.), Majority Whip Kevin McCarthy (R-Calif.) and Budget Committee Chairman Paul Ryan (R-Wis.) in order to try to reach an agreement with Obama. There is no evidence this is true.

“We’ve heard about all the infighting going on with the House leadership. I don’t know how valid it is,” Reid said. “I just got a message here that there’s a battle going on between McCarthy and Ryan and the majority leader in the House … and Boehner.”

Republicans dismissed Reid’s claims as “pure fantasy,” and it does appear that the GOP leadership has remained strongly united behind Boehner up until now.

Carrie Budoff Brown contributed to this report.