Barack Obama’s bid to engineer a massive debt deal to right the U.S. fiscal ship has been caught in the shoals of 2012 politics, as rank-and-file Republicans mobilize to warn their leaders in Congress against tax increases.

The President met Sunday night with top congressional bosses from both parties in a previously scheduled meeting that ended up being less about advancing the debt negotiations than salvaging them.

The 75-minute White House meeting ended without any comment from Mr. Obama, suggesting he had little grounds for optimism. Though talks were expected to continue on Monday, a stalemate has set in.

“The anti-tax wing of the GOP has asserted its primacy over the anti-debt wing,” offered Larry Sabato, director of the University of Virginia’s Center for Politics. “The Tea Party is anti-debt. But they are even more anti-tax.”

Late Sunday, the White House scheduled a press conference for Monday morning, perhaps to enable Mr. Obama to use his bully pulpit to shame Republicans into a compromise. He used a June 29 news conference to accuse the GOP of favouring tax deductions for corporate jet owners over aid to the old and needy.

But with only days left before Congress must pass legislation to raise the $14.3-trillion (U.S.) ceiling on federal borrowing – or risk a default by the U.S. Treasury on its debt – prospects have dimmed considerably for the 10-year, $4-trillion deficit-reduction deal Mr. Obama had hoped to make the cornerstone of his re-election campaign in 2012.

Republicans had made their support for raising the debt limit by the Aug. 2 deadline conditional on an agreement with the White House to cut the deficit by an equal sum over 10 years. In exchange for large cuts to social programs, GOP House of Representatives Speaker John Boehner had showed openness to tax changes that would have raised $1-trillion.

But Mr. Boehner suddenly reversed his position over the weekend after taking heat from members of his own caucus and strategists for the party’s 2012 presidential candidates. They not only fear a backlash from the GOP’s insurgent Tea Party faction, but worry that a major debt deal would work to Mr. Obama’s political advantage more than theirs.

As Mr. Obama’s lieutenants took to the Sunday morning talk shows to press the administration’s case for the “biggest deal possible,” top Republicans pushed back just as hard against tax increases.

“To get a big [deficit] package would require big tax increases in the middle of an economic situation that is extraordinarily difficult with 9.2 per cent unemployment,” Mitch McConnell, the top Republican in the Senate, told Fox News. “We think it’s a terrible idea. It’s a job killer.”

Republicans told the White House to scale down its ambitions and aim for a deal that seeks to cut the deficit by about $2-trillion over 10 years, almost entirely by cutting spending.

Since the GOP has made every $1 increase in the debt limit conditional on achieving $1 in deficit reduction, however, a smaller deal now could mean Congress is forced to take a second vote on the debt ceiling next year. That is because the federal government needs to borrow about $2.4-trillion between now and late 2012 to finance projected spending.

The White House is eager to avoid holding yet another messy debt ceiling vote just as Mr. Obama prepares to face the voters in 2012.

“The awful unemployment numbers that came out Friday have convinced Republican leaders that they have a decent chance to win it all in 2012 – the presidency and both houses of Congress,” Prof. Sabato said. “Their view is: ‘Why throw Obama a lifeline by giving him a grand debt bargain that he can brag about?’”

Mr. Boehner, who took over as Speaker in January after Republicans swept the House in last fall’s midterm elections, also faces a potential challenge from his own lieutenant, House Majority Leader Eric Cantor. Mr. Cantor, who attended Sunday’s meeting, has pushed for a smaller deal.

The Speaker has also been dogged by the presence of the voluble contingent of anti-tax Tea Partiers in his own caucus. Indeed, all but seven of 240 House Republicans have taken the so-called Taxpayer Protection Pledge crafted by Americans for Tax Reform, a powerful anti-tax lobby whose endorsement is as essential to most GOP candidates as that of the National Rifle Association.

By taking the pledge, politicians agree to oppose “any and all efforts” to increase corporate and personal tax rates. Any elimination of tax deductions they agree to must be matched by tax cuts elsewhere.

Mr. Boehner’s apparent willingness to consider letting Bush-era tax cuts for the wealthy expire at the end of 2012, in exchange for a promise from the White House of major tax reform in the future, was met with widespread skepticism in Republican circles.

A scathing weekend editorial in The Wall Street Journal made it clear that Mr. Boehner would be in for a rough ride from traditional Republican allies unless he backtracked.

“A tax increase now for the promise of tax reform later won’t fly,” the newspaper warned. “Mr. Boehner shouldn’t bet his [House] majority on Mr. Obama’s promises.”

The schism within the Republican family over how to handle the tax issue is not the only obstacle Mr. Boehner must overcome. He must fight the impression, common among the Tea Party faction of the party, that there is no urgent need to raise the debt ceiling at all.

“Don’t let them scare you by telling you that the country’s going to fall apart,” Minnesota congresswoman Michele Bachmann urged her supporters in Iowa, where she was campaigning Saturday for the GOP presidential nomination.

Treasury Secretary Timothy Geithner shot back on Sunday on NBC’s Meet the Press, warning of “catastrophic damage across the American economy and across the global economy” if legislators fail to act by Aug. 2.

Yet, the debt talks could falter not only because of the fight for political advantage between the parties. They could also become a casualty of the rivalries among Republicans themselves.