After meeting, Obama urges leaders to take 'immediate action'

President Obama said Friday he was "modestly optimistic that an agreement can be achieved" to avoid the so-called "fiscal cliff," but warned congressional leaders he would demand an "up or down vote" on a Democratic Senate bill if a bipartisan agreement could not be reached in a timely fashion.

"We had a constructive meeting today," Obama said. "Sens. Reid and McConnell are discussing a potential agreement."

The president's remarks came shortly after a meeting with congressional leaders, Vice President Biden and Treasury Secretary Timothy Geithner in the Oval Office.

But the president also warned that if the leaders were unable to strike an agreement, he would push for an up-and-down vote on a proposal that would increase taxes on those making more than $250,000 annually, and extend unemployment insurance.

"If we don't see an agreement between the two leaders in the Senate, I expect a bill to go on the floor ... that makes sure taxes on middle-class families don't go up," Obama said.

The president said he believed such a plan "could pass both houses with bipartisan majorities, as long as these leaders allow it to come to a vote."

Blasting the negotiations as "déjà vu all over again," Obama also chastised congressional leaders for waiting until the last minute to strike a deal.

"Outside of Washington, nobody understands how it is that this seems to be a repeat pattern over and over again," Obama said, adding "the hour for immediate action is here."

Senate Minority Leader Mitch McConnell (R-Ky.) confirmed that talks with the White House and Senate Majority Leader Harry Reid (D-Nev.) were under way.

"Hopefully we can come up with something we can recommend to our respective conferences," he said.

Reid said that legislators were "out of time" and would look to strike a deal in "the next 24 hours."

“We have a number of different directions we’re going to try to take and we’re going to see what can be worked out,” Reid said.

An aide for Speaker John Boehner (R-Ohio) also indicated that a deal could emerge from the Senate.

"The Speaker told the President that if the Senate amends the House-passed legislation and sends back a plan, the House will consider it — either by accepting or amending," the aide said. "The group agreed that the next step should be the Senate taking bipartisan action.”

House Minority Leader Nancy Pelosi (D-Calif.) told reporters at the Capitol that it had been a "constructive and candid" meeting, and that Boehner had made it clear he could not move legislation in the House without the Senate acting first.

"It's about working together to put something together, and we're eagerly awaiting what form that might take," she told reporters. "Let's have the Senate put something together and see where that takes us.

"Candor is constructive, and I think it moved us, but we'll see," she said.

Meanwhile, the White House was working to calm fears in the financial markets as the deadline approached. Stocks tumbled Friday, with the Dow Jones index dropping 1.2 percent. White House staff were schduled to speak on a conference call with CEOs at 5:30 p.m. on Friday; Obama waqs not scheduled to be on the call, but Geithner, acting Office of Management and Budget Director Jeff Zeints and Obama adviser Valerie Jarrett were said to be taking part, the White House said.

The president is also slated to appear on Sunday's "Meet the Press," his first appearance on the show since 2009.