January 3, 2013 10:52 AM

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US financial deal does not address deficit & debt problems :IMF

The International Monetary Fund says U.S. actions to avoid the fiscal cliff did not go far enough to address the country's long-term economic problems including its deficit and overall debt. In a statement yesterday, IMF spokesman Gerry Rice said more remains to be done to put U.S. public finances back on a sustainable path without harming what it said was the still fragile recovery. U.S. lawmakers, in a late night session yesterday passed a measure to avert the so-called fiscal cliff with a plan President Barack Obama calls one step in a broader effort to strengthen the American economy.The U.S President spoke late Tuesday, shortly after the Republican-dominated House of Representatives approved the measure passed early in the day by the Senate. Some conservative House members tried to add more spending cuts to the plan, but did not have enough support among their fellow lawmakers to take such action.President Obama and congressional Republicans have sparred for more than a year over tax rates, the extent of government spending, chronic budget deficits and the country's mounting debt. Congressional leaders described Tuesday's deal as imperfect, but in the best interest of the American people.Under the plan, taxes will increase for individuals making more than 400,000 dollars a year and couples earning more than 450,000 dollars, the first U.S. income tax increase in 20 years. The package will also extend unemployment benefits for a year and boost taxes on large inheritances.

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