Fiscal cliff: Compromise falling into place?

fiscal cliff
fiscal cliff

(CBS News) Congress goes back to work on Tuesday, facing pressure to work out a deal preventing automatic spending cuts and tax hikes at the end of the year.

But unlike the last budget crisis two years ago, both sides seem to be willing to compromise.

There are signs of progress, but senior administration officials tell CBS News that they believe the president has only a relatively short time to get Congress to agree on a solution -- and that he'll campaign across the country to get support for it.

Over the weekend, Democrats and Republicans both suggested that they have the baseline for a deal: Democrats seem willing to cut some entitlement spending, and it appears that after losing the White House and losing members in both houses of Congress, Republicans are willing to negotiate on increasing revenues.

Sen. Lindsey Graham, R-S.C., said, "We need more revenue in Washington. We need more private sector jobs. We don't need to raise tax rates. We need to limit loopholes and deductions for the wealthy."

The president's negotiating position, expressed on Friday, is that he feels he now has a mandate to demand that the rich pay a higher share of taxes. "I just want to point out this was a central question during the election," Mr. Obama said Friday. "It was debated over and over again. And on Tuesday night, we found that the majority of Americans agree with my approach."

Full coverage: America's debt battle

The president and congressional Republicans have tried before and failed to solve the nation's debt crisis. But Speaker John Boehner, R-Ohio, told House Republicans that after last week's election, the mandate from the American people is to work together, even if it means additional revenues through tax reform.

Meanwhile, Bill Kristol, editor of the influential conservative magazine The Weekly Standard, seemed to cave in on the president's demand that wealthy people pay more: "You know what? It won't kill the country if we raise taxes a little bit on millionaires. It really won't, I don't think. Really, the Republican Party is going to fall on its sword to defend a bunch of millionaires, half of whom voted Democratic and half of whom live in Hollywood?"

The president will begin making his case this week, but what's different this time is that administration officials are already suggesting to Congress that Mr. Obama is willing to let the deadline pass -- let tax rates go up and spending be cut if he can't get a deal that he wants.

For Bill Plante's full report, watch the video in the player above.