For his part, Daschle said his party will make hard choices on safety net programs it holds dear, such as Medicare and Medicaid.
"I think Democrats are prepared to work on entitlements, but there's two ways of doing it. You can just cut and shift the costs onto somebody else, or you can really redesign the programs and improve them. And I think that's really the essence of what we've got to do. Let's redesign these programs to make them work better, not just shift the program costs onto somebody else," Daschle said.
Lott added that he learned in his six years as Senate GOP leader it's important to know when to lead and "when to be a follower."
"Whether we like it or not, this is really going to come down to the best judgments of the president and the speaker. Both of them will be consulting with their players in both parties, in both bodies, but you've got to give them a little latitude to see what they can come up with," Lott said. "You may not be able to live with it, but everybody's taking up positions right now and frankly it's making a conclusion more difficult by some of the things that's been said on both sides of aisle."
Both men said they hope the two sides reach a deal on the fiscal cliff, not just because of the very real implications for the economy but because of how critical these talks are for setting the tone for the president's next term.
"This is really a reset moment," Daschle said. "I call this period between now and, say, the end of February a reset moment where you can create a different environment. And this will be the test. If we reset, it's going to have to happen around the fiscal cliff first, because that's the first order of business. But there are a lot of other issues out there that could be addressed if we could really create a new climate. And whether we do in part depends on the success of this effort right now."
The two men genuinely became friends during their time leading the Senate.
It's hard to imagine the current Senate Democratic Majority Leader Harry Reid and Republican leader Mitch McConnell having the kind of relationship in which they share information or cut deals during secret talks out on a Capitol balcony.
"Maybe more than we know," Lott said, smiling.