As the January 1 deadline nears, the Senate's top Democrat and Republican said they were entering talks with the White House aimed at avoiding the fiscal cliff.
Majority leader Harry Reid and Republican leader Mitch McConnell gave a relatively upbeat assessment after the duo and top House leaders had what McConnell called a "good" meeting with Mr Obama.
"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 politicians by tomorrow, 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. He cautioned, "Whatever we come up with is going to be imperfect."
Success was far from guaranteed in an atmosphere of mistrust -- even on a slimmed-down deal that postponed hard decisions about spending cuts into 2013. Congressional Democrats said Mr Obama was ready with a revised offer to present.
But that drew a denial from a person familiar with the talks, who said the president would review his proposal from a week ago, when he urged lawmakers to preserve tax cuts for most while letting rates rise above incomes of $250,000 a year.
At the same time, Mr Obama said politicians should extend unemployment benefits for the long-term jobless. The person was unauthorised to discuss the private meeting publicly and spoke on condition of anonymity.
For Mr Obama, the 11th-hour scramble represented a test of how he would balance strength derived from his re-election against an avowed commitment to compromise in the face of divided government.
The stock market was down again yesterday amid the developments in Washington.