Obama 'modestly optimistic' on fiscal cliff deal

President Obama on Friday said he was "modestly optimistic" that lawmakers would be able to avert the fiscal cliff of expiring tax cuts and automatic spending reductions.

Following an afternoon meeting with congressional leaders at the White House, the leaders agreed that Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., would work to try to find a compromise. If they are unable to agree, Obama said he would urge Reid to seek an up-or-down vote on a package that includes Democratic priorities like renewing the Bush-era tax cuts for the middle class and extending unemployment insurance.

House lawmakers are scheduled to return on Sunday, a day before a slew of tax cuts expire and about two days before deep, across-the-board cuts in federal spending go into effect. Going over the cliff would be a "politically self-inflicted wound to our economy," Obama told reporters.

Before Obama's statement, a Boehner aide said the lawmakers "spent the majority of the meeting discussing potential options and components for a plan that could pass both chambers of Congress." The group agreed that the Senate would make the next move, the aide said.

If the Senate amends a House-passed bill, the House will act on it, either amending or accepting it, Boehner told the president, according to the aide.