Congressional negotiators burrowed into their Capitol offices to see if they can stop the US economy from falling off of a ‘fiscal cliff’ in just three days when the biggest tax increases ever to hit Americans in one shot are scheduled to begin.

Aides to Senate Majority Leader Harry Reid, a Democrat, and Senate Republican leader Mitch McConnell were expected to work through the day on a possible compromise that would set aside $600 billion in tax increases and across-the-board government spending cuts that are set to kick in next week.

A variety of lower taxes are scheduled to expire on 31 December.

If allowed to rise, the approximately $500 billion value of the revenue increases would represent a historic hike when taken together.

The combined punch of the tax increases and spending cuts would likely put the US economy into a downward spiral, according to economists' forecasts.

"We're now at the point where, in just a couple days, the law says that every American's tax rates are going up. Every American's paycheck will get a lot smaller. And that would be the wrong thing to do for our economy," President Barack Obama said in his weekly radio and internet address.

At midday, Mr McConnell walked into his office on the second floor of the Capitol. Asked by waiting journalists if he thought his efforts would be successful, Mr McConnell responded: "I hope so."

A Senate Republican leadership aide said that it might not be known until sometime on Sunday whether these talks bear fruit. That is when leaders are expected to brief their rank-and-file members.

The Senate is scheduled to hold a rare Sunday session but it was not clear whether the chamber would have fiscal cliff legislation to act upon.