The new House-Senate panel charged with crafting a long-term budget compromise is apparently aiming low, with leaders on both sides of the Capitol saying Thursday that there will be no so-called "grand bargain."

House Budget Committee Chairman Paul Ryan (R-Wis.) who will lead the GOP side of negotiations, told Reuters on Thursday that he thinks talks should focus on something smaller.

"If we focused on doing some big grand bargain, like those prior efforts you mention, then I don't think we'll be successful because we'll focus on our differences," Ryan said. "Each party will demand that the other compromises a core principle, and then we'll get nothing done."

Senate Majority Leader Harry Reid (D-Nev.) agreed, dismissing thoughts of a grand bargain as "happy talk" during a local radio appearance.

Asked about including Medicare and Social Security reforms in the package, Reid said it wouldn't happen.

"Get something else in your brain; stop talking about that," Reid said. "That is not going to happen this time. There's not going to be a grand bargain."

Reid added: "Hopefully in the next year or so (we can) do something on a grand bargain. But the Republicans are going to have to retake their party or it will never happen. Because they have their mindset on doing nothing more on revenue. But until they get off that kick, there's not going to be a small bargain."