The US government needs to do more to put its public finances back on a sustainable path with harming a fragile recovery in its economy according to the IMF.
Spokesman Gerry Rice said he welcomed the lawmakers action “However, more remains to be done,”
“Specifically, a comprehensive plan that ensures both higher revenues and containment of entitlement spending over the medium term should be approved as soon as possible,” he said. Mr Rice said it is also crucial congress raise the debt ceiling “expeditiously and remove remaining uncertainties about the spending sequester and expiring appropriation bills”.
The deal, which raised tax rates for top earners and extended tax breaks for lower earners, avoided a scheduled jump in tax rates across the board. Still, it represented the largest tax increase for US taxpayers in the past two decades.
It also left undone a host of unresolved issues, notably, whether to raise the government’s borrowing limit to pay for planned government operations and what to do with abrupt spending cuts scheduled to take effect later this year. The stage is set for another round of bruising political fights over the next several months.
Moody’s also warned that the outcome of negotiations would determine the US’ credit rating adding that more deficit reduction measures were needed to avoid a downgrade.
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(DJ newswires/The Australian)
