President Barack Obama held out hope for a last-minute agreement to avoid the "fiscal cliff" of tax increases and spending cuts after a meeting with congressional leaders, scolding Congress for leaving the problem unresolved until the eleventh hour.

"The hour for immediate action is here," he told reporters at the White House. "I'm modestly optimistic that an agreement can be achieved," he said.

Obama and lawmakers are working to prevent around $600 billion in combined federal spending cuts and tax increases, a shock, economists say, could stop the economic recovery in its tracks and perhaps reverberate beyond US shores.

The president, who won re-election on a platform that included a pledge to raise taxes on top earners, said Senate leaders were working right now to craft a bipartisan measure that could win approval in both houses of Congress.

But if those last-ditch efforts were to fall short, lawmakers should hold a vote on a "bare minimum" measure that would extend existing tax rates for all but the wealthiest Americans and extend unemployment insurance, he said.

Obama took Congress to task for stalling on negotiations in a manner that is reminiscent of the 2011 stalemate that brought the nation close to the brink of defaulting on its debt and that hurt the economic recovery. "This is déjà vu all over again," he said.

"America wonders why it is that in this town for some reason you can't get stuff done in an organized timetable," he added. "Well, we're now at the last minute."

The president said the latest budget impasse was once again harming economic growth.

"Already you're seeing businesses and consumers starting to hold back because of the dysfunction that they see in Washington."-Reuters