A House source involved in the negotiations tells me, “Talks ended a few hours ago at an impasse largely over the size of cuts -- and their composition. While nothing is agreed to until everything is agreed to, there has been some narrowing on the riders, but there has not been much movement on the cuts. Dems last night essentially wouldn’t consider or work off of anything above their spending level, which is a huge problem.”

The source also points to this portion of a Politico report as accurate:

The Boehner plan proposes a $1.049 trillion cap for nonemergency discretionary appropriations for 2011, about $79 billion less than Obama initially requested in his budget and $39 billion less than the spending rate at the beginning of this year.

Within these totals, the GOP is asking for higher defense spending than previously agreed to and $2 billion more the administration wants, thereby putting more pressure on domestic agencies to make cuts in their accounts. But there has been substantial movement toward Obama on the question of accepting more savings from mandatory spending programs vs. discretionary appropriations.

In fact, a breakdown of the counteroffer from the White House and Democrats shows relatively little difference there. Instead of $39 billion in cuts, the counterproposal calls for cuts of $34.5 billion, or a ceiling of about $1.0535 trillion. In the case of domestic spending, the two sides are still about $6.5 billion apart, and Republicans argue that this remains a serious stumbling block. But measured against the size of the government and the consequences of a shutdown, Democrats respond that the differences are small.

So long as we are north of $33 billion in cuts, House Speaker John Boehner will be able to claim victory. Now they are just arguing about the margin.