House Speaker John Boehner, a Republican from Ohio, center, speaks while Harry Reid, Democratic Senator from Nevada, left, and Mitch McConnell, Republican Senator from Kentucky, listen after meeting with U.S. President Barack Obama at the White House in Washington, D.C., U.S., on Friday, Nov. 16, 2012. (Joshua Roberts | Bloomberg | Getty Images)
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They expressed confidence they could reach a deal before Christmas.
The Dow Jones Industrial Average [.DJI 12588.31 45.93 (+0.37%) ]erased its 60 point loss after leaders from both parties appeared on the White House lawn following the meeting.
Though no details were disclosed, both sides appeared willing to give ground on the contentious issues of raising taxes and cutting spending.
"I believe we can do this and avert the fiscal cliff," Republican House Speaker John Boehner told reporters on the White House lawn after the leaders met with President Barack Obama.
Democratic Senate Majority Leader Harry Reid was equally upbeat. "We feel we understand what the problem is," he said. "And I feel very good about what we were able to talk about in there."
He said lawmakers will meet with the president again after Thanksgiving.
Rep. Nancy Pelosi, the top Democrat in the House, said she "feel confident that a solution may be in sight."
White House Press Secretary Jay Carney said Obama and the legislative leaders "agreed to do everything possible to find a solution." Carney said White House officials will continue the talks as Obama travels to Asia. Obama leaves on Saturday for a trip that will include a historic stop in Myanmar.
After the meeting, Boehner and Senate Minority Leader Mitch McConnell said they offered higher tax revenue as part of a deal. Boehner said he outlined a framework that is consistent with Obama's call for a "balanced" approach of both higher revenue and spending cuts.
"To show our seriousness, we put revenue on the table, as long as it's accompanied by serious spending cuts," Boehner said.
In offering conditional backing for new revenue, McConnell said reforms to social safety net programs also are necessary.
"We fully understand that you can't save the country until you have entitlement programs that fit the demographics of changing America in the coming years," the Senate minority leader said. "We're prepared to put revenue on the table provided we fix the real problems."
The meeting marked the first time Obama, a Democrat, sat down with his Republican opposition since he won re-election last week.
All eyes were on Boehner, who will have to balance the wishes of a newly confident president with the demands of his rank-and-file conservatives.
The hour-long talks began with Obama calling for "tough compromises."
Source: CNBC.com with Reuters and AP