After a late-hour meeting with four top congressional leaders at the White House on the "fiscal cliff" that seems to have led to progress, President Obama said he is "modestly optimistic" that a deal can be reached before Tuesday's so-called "fiscal cliff" deadline.
In a news conference after the meeting, the president said it was a "good and constructive discussion about how to prevent the tax hike on the middle class." He cautioned however, that he's seen this play before and will "wait and see [if a deal] actually happens."
Sending a warning shot to Congress that they need to act, the president warned, "The American people are not going to have any patience for a politically self inflicted wound to our economy."
The meeting is the first between the four leaders in weeks and took place after the president and Congress cut short their Christmas vacations to work on a last-minute plan to avert the federal spending cuts and the tax increases that economists warn could harm the economy.
The congressional leaders left the 65-minute meeting sounding more optimistic than they have in weeks. The Republican and Democratic leaders in the Senate have been tasked with coming up with a deal that can get through Congress.
"I'm hopeful and optimistic," Senate Minority Leader Mitch McConnell, R-Ky., said on the Senate floor today shortly after returning from the White House.
Senate Majority Leader Harry Reid, D-Nev, called the meeting "constructive" and "positive" and indicated that a deal can be reached between he and McConnell by the time the Senate returns to work Sunday afternoon.
CBS News Chief White House Correspondent Major Garrett reports that the main sticking point between Republicans and Democrats continues to be the income threshold that will see taxes increase. President Obama opened the meeting insisting that taxes increase for households making more than $250,000, but Republicans have long rejected that proposal and House Speaker John Boehner, R-Ohio, failed to pass a proposal through the Republican-led House last week that would raise taxes on those making more than $1 million.
Another area of contention is the extension of unemployment benefits, which expire tomorrow and in 2012 cost $94 billion, according to the Congressional Budget Office.
As for the $110 billion in automatic spending cuts set to go into effect at the beginning of the year, a Republican aide told CBS News the cuts will go into effect unless Congress addresses it at a later date. The aide also said that the debt limit, which is expected to be reached soon, is also not likely to be part of the last-minute agreement.
The president said that if the Senate leaders are unable to reach a deal, he has asked Senator Reid to introduce a "bare bones" piece of legislation that prevents taxes from rising on most Americans in the new year and extends unemployment benefits.