WASHINGTON - US President Barack Obama will cut short his family Christmas holiday in Hawaii to tackle the looming "fiscal cliff" back in Washington.

Obama was scheduled to leave Hawaii Wednesday night and arrive here early Thursday, the White House said Wednesday.

US lawmakers were also set to return to Washington Thursday. Democrats and Republicans have less than one week to come up with a deficit reduction plan to avert the year-end "fiscal cliff", which will affect nearly every US family.

Unless US Congress acts by the end of the year, a combination of tax increases and sweeping spending cuts totalling about 600 billion US dollars will kick in, the effects of which could drive the economy back into recession.

On Friday, before setting off on his family holiday, Obama called on Congress to pass a pared-down deficit reduction plan of extending the current tax rates for all but the rich and extending the nation's unemployment benefits.