Politicians in the United States held crucial talks on Sunday in attempts to stall the fiscal cliff.
Congress must reach a deal by the end of the year to stop steep spending cuts and tax rises from taking effect in January.
The BBC reports that failure to tackle the federal government debt limit and budget deficit in 2011 resulted in an agreement to postpone difficult decisions on spending until the end of 2012 and the imposition of compulsory cuts if no deal was reached by 31 December.
That is also the date that tax cuts introduced by former President George W Bush are due to expire.
Democrat Senate leader Harry Reid and his Republican counterpart Mitch McConnell have been locked in negotiations over the weekend.
According to the Washington Post, they had set themselves a deadline of 3pm on Sunday to reach a compromise agreement, so caucus meetings of their members could be convened to decide whether the measure has enough support to be put to a vote.
The Senate could then vote on the measure and allow the House of Representatives enough time on Monday to consider it, said the paper.
However, the Senate will now reconvene on Monday. Senator Harry Reid said there was still significant distance between the parties.
Republican and Democratic leaders remain divided over core issues about tax and government funding.
The BBC reports there is also debate over where to set the threshold for tax rises. Democrats say the Bush era tax cuts should be extended for all Americans except those with annual earnings of more than $US250,000.
Republicans say the deficit is a consequence of excessive government spending. They want the tax threshold set higher, at around $US400,000.
Comment by President
President Barack Obama said he had made significant compromises already by offering to cut or reform welfare programmes in exchange for raising taxes for the highest earners.
"The offers that I've made to them have been so fair that a lot of Democrats get mad at me," he said on Meet the Press on NBC TV.
In an interview recorded on Saturday and broadcast on Sunday, Mr Obama said that if all else failed and taxes do go up, he would introduce a bill to cut them when Congress reconvenes on 4 January.