President Obama said he's "optimistic" on reaching a fiscal cliff deal with congressional Republicans, predicting that the GOP will agree to extend tax cuts for most Americans ahead of the January 1 deadline.
"I'm pretty confident that Republicans would not hold middle class taxes hostage to trying to protect tax cuts for high-income individuals," Obama said in an interview with ABC News' Barbara Walters, portions of which aired Tuesday evening.
Obama met privately with House Speaker John Boehner (R-Ohio) on Sunday to discuss the combination of spending cuts and tax hikes set to kick in at the end of the year. On Monday, the president made a counteroffer to Boehner, which the Republican leader countered with another proposal on Tuesday.
While negotiations remain ongoing, the president told Walters that he believes they will reach a deal in time.
"I remain optimistic," Obama said. "I'd like to see a big package. But the most important thing we can do is make sure that middle class taxes do not go up on January 1."
The president said he's willing to compromise on spending cuts if Republicans agree to extend the Bush-era tax cuts for all but the top two percent of earners.
"If the Republicans can move on that we are prepared to do some tough things on the spending side," he said.
Raising the Medicare eligibility age is "something that's been floated" as a potential point of compromise, Obama said. However, he remains skeptical on the idea, which many Democrats fervently oppose.
"When you look at the evidence it's not clear that it actually saves a lot of money," Obama told Walters. "But what I've said is let's look at every avenue, because what is true is we need to strengthen Social Security, we need to strengthen Medicare for future generations, the current path is not sustainable because we've got an aging population and health care costs are shooting up so quickly."
Walters' full interview with the president is set to air Friday.