Before the election, the president's policy director, James Kvaal, explained Obama wants "a balanced plan that cuts the deficit by $4 trillion with $2.50 worth of spending cuts for every dollar in revenue and reduces spending on Medicare, Medicaid and other entitlements."
If a spirit of compromise grips the capital after the election, the best-case scenario is a framework deal: In November and December, the parties would agree to general targets for revenue increases and spending cuts plus new tax terms and then work out the details six or nine months down the road. In this rosy scenario, the nation would avoid a new year's tax hike and the ugly sequester.
Sen. Dick Durbin, D-Illinois, said he thinks a deal is possible.
"We have a chance in the lame duck to at least start the process, and I think there's a chance to rally bipartisan support," he said in an interview before Tuesday's election. "These are basic issues we can work out, and the president is in a position to do that."
Not everyone is so sunny.
Several Democrats said the president has learned from past negotiations with House Republicans and this time will be ready to stand his ground. One top Democrat with close ties to leaders on Capitol Hill and the White House said, "Obama's leverage is he doesn't have to do anything and everyone's taxes go up."
"That's a huge forcing mechanism," one added.
Several senior Democrats told CNN they believe the president would be prepared to allow that increase, which would affect personal income tax, the estate tax, dividends and capital gains taxes.
Adding to the potential for a protracted struggle, it's widely believed that the $1.2 trillion in spending cuts kick in immediately at the start of 2013. However, multiple sources aware of talks said there is wiggle room and that austerity cuts could be delayed to create more time for a deal.
As a result -- in theory at least -- negotiations could continue before the economy takes a direct hit.
Given the influence of Republican super PACs, there is concern among Democrats that Republicans would not get on board with a compromise unless GOP "big money" gets behind them, offering cover for the midterm elections.
Durbin insisted that Obama is hoping for the best with the tax cuts and the sequester but said the president won't yield on either.
"The president isn't going to put either gun in the holster until we have this showdown under way," Durbin said.