US needs to address deficit, debt problems: IMF

The International Monetary Fund (IMF) says that US political leaders need to reach a deep and wide-reaching resolution to address the country’s long-term fiscal deficit and debt problems.

The global emergency lender issued a statement on Wednesday, saying that although US congressional representatives were able to stop the country from going over the fiscal cliff, they made little progress on dealing with the larger-picture problem of the US deficit, and that they need to increase the country’s statutory debt ceiling in order to keep funding that deficit.
AFP quoted IMF spokesman Gerry Rice as saying: “More remains to be done to put US public finances back on a sustainable path without harming the still fragile recovery.”
Rice said: “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… It is crucial to raise the debt ceiling expeditiously and remove remaining uncertainties about the spending sequester and expiring appropriation bills.”
Late on Tuesday, the House of Representatives approved a Senate-backed deal to extend tax cuts for middle class US citizens and raise tax rates on top earners. The House voted 257 to 167 to send the deal to President Barack Obama to sign.
US Treasury Secretary Timothy Geithner said on December 27, 2012, that “the country hit its debt ceiling.” America’s debt currently stands at over USD 16 trillion.