President: Senators Discussing Possible Fiscal Cliff Agreement

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WASHINGTON, D.C.-- President Barack Obama said on Friday that he is "modestly optimistic" a deal to avoid the fiscal cliff can still be reached, but he warned that no one will get 100% of what they want.

The president said his Friday meeting with Congress was "constructive."

He says senators are discussing a possible agreement.

The principal dispute continues to be over taxes, specifically the demand by Obama and Democrats to extend most of the tax cuts passed under Bush while allowing higher rates of the 1990s to return on top income brackets.

Obama campaigned for re-election on keeping the current lower tax rates on family income up to $250,000, which he argues would protect 98% of Americans and 97% of small businesses from rates that increase on income above that level.

Republicans oppose any kind of increase in tax rates, and Boehner suffered the political indignity last week of offering a compromise -- a $1 million threshold for the higher rates to kick in -- that his GOP colleagues refused to support because it raised taxes and had no chance of passing the Senate.

(CNN Wire Staff contributed to this report)