UPDATE 1-Obama: 'modestly optimistic' fiscal cliff deal can be reached

WASHINGTON, Dec 28 (Reuters) - 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 U.S. 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."

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