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Capitol Hill leaders from both parties say they can come to an agreement with President Obama.
With the January deadline for the "fiscal cliff" looming, top Capitol Hill leaders seemed optimistic they could come to an agreement to raise federal revenue and cut spending.
President Obama sat down with congressional leaders Harry Reid, Nancy Pelosi, John Boehner and Mitch McConnell on Friday to try and reach consensus about how to avoid the impending tax hikes and spending cuts that are scheduled to go into effect at the end of the year.
"I think we're all aware that we have some urgent business to do," Obama said at the top of the meeting, reports NBC News.
The negotiations are likely to be tense, with both sides standing firm on long held beliefs on taxes and spending.
Obama said he will not consider any plan that does not raise the tax rates on the wealthiest 2 percent of Americans, while Republicans pledge that they will not agree to any rate increase, leaving the top rate at 35 percent for all income brackets, reports Reuters.
Republicans are also eager to cut entitlement spending for Medicare and other government benefit programs, which are expected to rise over the next few years, reports the Washington Post.
"We're prepared to put revenue on the table provided we fix the real problem," McConnell said.
He noted, however, that “most of my members, I think without exception, believe that we are in the dilemma we’re in not because we tax too little but because we spend too much.”
Boehner's office suggested to NBC News that their focus would be on long-term targets on levels of taxing, spending and entitlement reform that could be presented to lawmakers after Thanksgiving.
Despite the differences, Friday's meeting seemed a far cry from the toxic atmosphere of previous budget talks between the President and congressional Republicans.
A standoff lasted for much of 2011 when the government was brought to the brink of collapse several times and the country almost defaulted on the national debt.
The tone of Friday's meeting suggested a breakthrough in relations between both parties and the president.
"I feel very good about what we were able to talk about. We have the cornerstones of being able to work something out," Senate Democratic Leader Harry Reid said.
And both parties seemed acutely aware of the looming deadline.
“We’re going to do it now,” he said. “This isn’t something we’re going to wait until the last day of December to get it done.”