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For Boehner, Lofty Budget Goals Checked by Reality

At a private meeting about deficit reduction at the White House last week, Speaker John A. Boehner told his fellow Congressional leaders and President Obama that he did not spend 20 years working his way up to the top job on Capitol Hill just for the cachet of the title—he wanted to accomplish something big.

U.S. Minority Leader Rep. John Boehner
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U.S. Minority Leader Rep. John Boehner

So he and the president pursued an ambitious plan that would have reduced spending by as much as $4 trillion over 10 years. It was a transformative proposal, with the potential to improve the ugly deficit picture by shrinking the size of government, overhauling the tax code and instituting consensus changes to shore up Medicare and even Social Security. It was a once-in-a-decade opening.

But the speaker’s lofty ambitions quickly crashed into the political reality of a divided, highly partisan Congress. His decision on Saturday night to abandon the comprehensive deficit-reduction package, citing the White House’s insistence on tax increases, was a sharp reversal. It highlighted the challenge he faces in persuading his party to tolerate any compromise on government spending and exposed the fissures within his own leadership team over how to proceed.

Had Mr. Boehner forged ahead with a plan that fell flat with his rank and file, it could conceivably have led to a challenge of his leadership position, and it would certainly have undermined confidence among conservatives in his ability to lead the Republicans. Even opening the door to increased revenues as part of a deal with Mr. Obama and the Democrats struck many Republicans as a profound misreading of what conservatives, in Congress and at the grass-roots level, would tolerate.

Yet in his push for a sweeping deal, Mr. Boehner may also have underestimated the willingness of Mr. Obama to make concessions on traditional Democratic priorities and to challenge Congressional Democrats to give ground on programs like Medicare and Social Security, an approach that put pressure on Mr. Boehner to cede territory as well.

By pulling the plug on those negotiations, Mr. Boehner no doubt reduced the prospect of a messy fight within his party. But he also disappointed those—including some Republicans—who had hoped lawmakers and Mr. Obama could defy the odds and deliver a budget deal of historic consequence.

As a negotiator, Mr. Boehner operates in a laid-back style that belies canny instincts honed during a previous run in leadership after the Republican takeover in 1995 and his time as chairman of the Education and Labor Committee.

He has cut deals with Democrats in the past, including the late Senator Edward M. Kennedy, and he and Mr. Obama hammered out the 2011 spending deal in a showdown in April. Given the rapport he appears to be developing with the president, it seemed they might have a chance to reach a broad agreement despite the tremendous difficulties.

Mr. Boehner had good reason to pursue such a so-called grand bargain beyond the matter of his own legacy. A big deal could have resolved some of the most stubborn fiscal issues, freeing his ambitious majority to take on new matters while giving a lift to the economy and demonstrating the power of conservative Republican ideals.

From one political angle, it had special appeal. By persuading Democrats to endorse Medicare cuts, the speaker could have neutralized an issue that Democrats have been bludgeoning Republicans with since the House budget this spring called for converting that government insurance program into one subsidizing older Americans in private health plans.

But his motivations to back away were evidently stronger. The deal, which required roughly $1 trillion in new revenue, represented a serious political risk for Mr. Boehner, who found himself caught between the push for a legislative achievement and the Tea Party sentiments of his new majority and ambivalence of his top lieutenants.

By all accounts, the agreement taking shape called for closing corporate tax loopholes. And it was linked to a broad tax overhaul that could have left uncertain the fate of tax breaks for the nation’s affluent, which are due to expire after 2012. That was going to cause serious trouble with Republicans who are wedded to those Bush-era tax cuts and who consider allowing them to expire equivalent to a tax hike.

Mr. Boehner and the White House were engaged in delicate talks on the timing of the tax changes and how to package the plan so that it could be seen as not raising taxes to gain new revenue. The speaker argued that the tax rewrite would produce new revenues through economic growth and an expansion of the tax base. And he was pushing a legislative trigger to make certain that the tax changes occurred.

But fellow Republicans were not on board. At the White House meeting where Mr. Boehner said he wanted to go big, Representative Eric Cantor of Virginia, the No. 2 House Republican, threw cold water on the idea, saying the negotiations should focus on a midrange deal like the $2 trillion one that Vice President Joseph R. Biden Jr. had been leading. Those earlier negotiations broke down over potential tax increases as well.

“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,” said Brad Dayspring, a spokesman for Mr. Cantor. “Eric has always believed the Biden group identified between $2 trillion and $2.5 trillion in spending cuts that could represent the framework for an agreement.”

Other Republicans saw the Boehner idea as a political disaster in the making. Not only would it potentially hand Democrats a major victory by conclusively extending the Bush tax cuts for only the middle class, they said, it could cost House Republicans the majority in 2012 by throwing doubt on the tax breaks for wealthy Americans and angering voters who expected them to keep their pledge not to raise taxes.

Mr. Cantor and the speaker had been dancing around each other on the debt talks for a few weeks, and Mr. Cantor’s call at the White House for a more modest plan seemed an attempt to put some distance between himself and the speaker should Mr. Boehner get too far ahead of House Republicans. Mr. Cantor does not appear eager to directly challenge Mr. Boehner’s leadership, but he wants to be in the right spot if things veer off track for the speaker.

Democrats say that because of Mr. Boehner’s retreat, they will now be able to portray Republicans as refusing major Democratic concessions on spending in order to protect tax breaks for big businesses and rich Americans. Whether that works depends on how the debt fight plays out.

But one lesson has emerged: going for the rewards offered by a big deal requires the willingness to take big risks—and such political nerve seems to be lacking in Washington at the moment.