President Barack Obama said he is "modestly optimistic" Congress can reach a deal to avoid the fiscal cliff, but "the hour for immediate action is here. It is now."

If Democratic Senate Majority Leader Harry Reid and Senate Republican Minority Leader Mitch McConnell don't reach an agreement on a deal, the president said there should be a vote on his own plan.

"I expect a bill to go on the floor . . . that makes sure the taxes on middle class families don't go up and that unemployment insurance is still available for 2 million people," Obama said. "That lays the groundwork, then, for additional deficit reduction and economic growth steps that we can take in the new year."

He said the unemployment rate is the lowest since 2008, but that businesses and consumers are holding back now because of the "dysfunction" in the nation's leaders.

"This is deja vu all over again," Obama said. "America wonders why it is that in this town, for some reason, you can't get stuff done in an organized timetable. Why everything always has to wait until the last minute. Well, we're now at the last minute, and the American people are not going to have any patience for a politically self-inflicted wound to our economy."

The end game at hand, the White House and Senate leaders launched a final attempt at compromise Friday night in hopes of preventing a toxic blend of middle-class tax increases and spending cuts from taking effect at the turn of the new year.

"I am hopeful and optimistic" of reaching an agreement after months of gridlock, said McConnell, of Kentucky, after a meeting with Obama and top congressional leaders at the White House.

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.

Reid said, "I'm going to do everything I can" to prevent the tax increases and spending cuts that threaten to send the economy into recession. He cautioned, "Whatever we come up with is going to be imperfect."

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Success was far from guaranteed in an atmosphere of political mistrust -- even on a slimmed-down deal that postponed hard decisions about spending cuts into 2013 -- in a Capitol where lawmakers grumbled about the likelihood of spending the new year holiday in the Capitol.

With AP