The President basically ended any hope of a grand bargain, breaking off negotiations with House Speaker John Boehner. President Obama is holding a press conference right now on the way forward. Basically, he wants the Congressional leadership to meet at the White House at 11:00am tomorrow to “explain to me how we’re going to avoid default.” Obama said “we have now run out of time.”

More in a moment.

…A clearly agitated President Obama pronounced that Congress had run out of time to come up with a big solution on deficit reduction tied to the debt limit. The President clearly shifted this to Plan B, saying that the leadership has been summoned to the White House tomorrow morning.

“What this came down to was there doesn’t seem to be a capacity for them to say yes,” Obama said, reacting to John Boehner walking out of the negotiations and not even returning phone calls from the President today. He said that Democrats bent over backwards, pushing the deal as far in the Republicans’ direction as possible. They just wouldn’t go for it. In the end, they refused to add any revenue into the deal.

The primary goal now is to increase the debt limit, and Obama still wants that through the 2012 elections. “We’ve seen how difficult it is to get any kind of deal done. We will not be in a better position 5-6 months from now,” Obama said.

Obama certainly wanted it to be known to the press that Democrats were more willing to compromise than Republicans. “When you write your stories tomorrow, this was not the usual food fight between Democrats and Republicans. A lot of Democrats stepped up in ways that were not advantageous politically. We showed we were willing to do the tough stuff on an issue Republicans ran on.” Obama promised a tick-tock running down every single step of the negotiations, what the White House offered, and what Republicans counter-offered. That’s a pretty clear indicator that the deal is dead.

This may be an advantage politically for the White House, as they pin the blame for this on Republicans. But that doesn’t get the debt limit raised. “At minimum, we’ve got to increase the debt ceiling. I think we need to do more than that.” Obama for the first time recently expressed the willingness to sign a debt limit deal without deficit reduction, citing Mitch McConnell’s plan that would put the political burden on the President. “I’m willing to take the responsibility, that’s my job. What we’re not going to do is to continue to play games, and string this along and then have to go through this exercise again.”

“Even if I didn’t think the deal was perfect, at least it would show that this place was serious,” Obama said, justifying his offer of a deal more generous than even the Gang of Six proposal. “If you want to be a leader, then you gotta lead.”

Obama remained confident that he would get an extension of the debt limit and avoid default. “I cannot believe that Congress would be that irresponsible.” He pointed out some of those letters he gets from all over the country as why this must happen.

“I’m getting letters from people who say, at the end of every month, I have to skip meals. People who are desperate at the end of every month. But not just those folks, you have business contractors. There are just a huge number of people who interact with the federal government. Imagine what that does to the economy when 70 million checks are put at risk. That is not going to be good for economic growth. We’ve got to get it done … If the House Republicans are not willing to ensure we avoid default, they would have to take responsibility for whatever happens.”

This was a pretty fiery Obama today, clearly angered that he couldn’t get his grand bargain done because of Republican intransigence. But it manifested itself in a real critique about not caring about everyday Americans who cannot get ahead. This didn’t necessarily connect to austerity, but the fire was good to see.

…the letter that John Boehner sent to colleagues announcing the breakdown of the talks is here.

…Harry Reid has a statement:

“Republicans have once again proven unable to overcome their ideological opposition to ending taxpayer-funded giveaways for millionaires, corporate jet owners and oil companies. I applaud President Obama for insisting that any deal to reduce our deficit be balanced between cuts and revenues. We must avert a default at all costs, so it is time to reengage in bipartisan talks on an agreement that at least accomplishes that goal.

“I agree with President Obama that a short-term extension is unacceptable.”

…I actually missed the first part of the press conference, when Obama put hard numbers to the offer. He said that he had over $1 trillion in discretionary spending cuts, and $650 billion in cuts to entitlements – “Medicare, Medicaid, Social Security” – on the table, in return of $1.2 trillion in revenues. That approaches $3 trillion, and when you add in foregone interest, you get to around $4 trillion.