The deal to reduce the deficit could be huge - somewhere between $1 trillion and $4 trillion.
The two sides are talking about taxes, Social Security, Medicare, and defense spending. Almost everyone agrees it has to be done by next week to give Congress time to pass a bill.
In his interview Tuesday with President Barack Obama, CBS Evening News anchor Scott Pelley spoke with the president in the same room of the White House where former President Franklin Delano Roosevelt broadcast his fireside chats on the radio.
They discussed how it wasn't that long ago that compromise in Washington was considered a virtue and not a vice.
Pelley: Ronald Reagan and Tip O'Neill were on opposite sides of the political spectrum, but they respected each other, they liked each other, and they got things done.
Mr. Obama: Right.
Pelley: Do you like [House] Speaker [John] Boehner?
Mr. Obama: I do. I think John would like to do the right thing.
Pelley: Do you trust him?
Mr. Obama: I do trust that when John tells me something, he means it. I think that his challenge right now is inside his caucus. But I think Ronald Reagan and Tip O'Neill are a great example.
Ronald Reagan repeatedly took steps that included revenue, in order for him to accomplish some of these larger goals. And the question is if Ronald Reagan could compromise, why wouldn't folks who idolize Ronald Reagan be willing to engage in those same kinds of compromises?
White House: McConnell's comment unfortunate
Pelley: Do you regret any of the things that you've said in all of this?
Mr. Obama: No. I think I've been pretty restrained. [LAUGHTER]
Pelley: Well, you told the Congress they don't do their work as well as your daughters do their homework.
Mr. Obama: What I said was is that they procrastinate, and that is absolutely true. I don't think I'd get any dispute about that...anywhere in the country. I mean, the fact of the matter is that we should not be leaving an issue of this magnitude that affects the world economy, as well as the American economy, to the last minute.
And yet Congress often leaves things to the last minute, and engages in the kind of brinksmanship that I think is pretty dangerous.
Pelley: How optimistic are you that a deal can be done? Time is running out.
Mr. Obama: Well, I think we can get it done. Now, if it turns out that the other side won't budge on anything, then we're gonna be here every day until we get this done.
Pelley: But, Sir, the Republican leader in the Senate said today that they can't do business with you as long as you occupy (the White) House, there will be no deal.
Mr. Obama: Well, then he's gonna have to explain to me how it is that we're gonna avoid default, because I'm gonna be President here for at least another year-and-a-half. And I don't think the American people would expect that the leader of the Republican party in the Senate would simply say that we're not gonna do business with the President of the United States.