US President Barack Obama, pushing for a deal to avoid the looming tax hikes and spending cuts known as the "fiscal cliff," has held last-minute talks with Senate leaders, saying he still believes an agreement can be reached before the January 1 deadline.
After Mr Obama and the leaders of Congress held an hour-long, high-stakes meeting to try to avoid the severe, automatic austerity measures that threaten to send the economy sputtering into another recession, the President called the gathering "good and constructive".
"The hour for immediate action is here," Mr Obama declared.
Democratic Senate Majority Leader Harry Reid and Republican leader Mitch McConnell gave a relatively upbeat assessment after the meeting.
"I am hopeful and optimistic" of reaching an agreement after months of gridlock, Mr McConnell said. He said he hoped for a compromise that could be presented to rank and file lawmakers by Sunday, little more than 24 hours before the year-end deadline.
Mr Reid said: "I'm going to do everything I can" to make a deal happen, but cautioned: "Whatever we come up with is going to be imperfect."
The US faces the fiscal cliff because tax rate cuts dating back to President George W Bush's tenure expire at the end of the year.
The pending across-the-board reductions in government spending, which will slice money out of everything from social programmes to the military, were put in place last year as an incentive to both parties to find ways to cut spending. That solution grew out of the two parties' inability in 2011 to agree to a grand bargain that would have taken a big bite out of the deficit.
Facing a deadline that was born out of Washington's dysfunction, success was far from guaranteed - even on a slimmed-down deal that postponed hard decisions about spending cuts into 2013 - in a Congress where lawmakers grumbled about spending the new year holiday in the Capitol.
If Congress cannot reach a broad deal to rein in deficit spending, Mr Obama said it should allow a vote on a basic package that would preserve tax cuts for middle-class Americans while extending unemployment benefits for the long-term jobless and working toward a foundation for a broader deal.