The Rangers prefer to sign Callahan to a six-year contract, but the two sides remain far apart on the dollars associated with a new deal.
According to a Monday morning article by Pierre LeBrun on ESPN, Callahan is now asking for an annual average salary of just under $6.5 million, down from the $7 million he initially requested.
The Rangers, however, do not appear interested in paying over $6 million, per year.
According to ESPN's Katie Strang, Callahan told the Rangers he would back down from his seven-year request prior to the Olympic break, which means the two sides are truly stuck on their own financial terms.
If Callahan is not signed by Wednesday's 3pm ET trade deadline, the Rangers are expected to trade him.
Several teams remain in the hunt for Callahan, including the Anaheim Ducks, San Jose Sharks, and Ottawa Senators.