News / USA

IMF Urges Repeal of Large US Government Spending Cuts

International Monetary Fund Managing Director Christine Lagarde speaks during a news conference at IMF headquarters in Washington, D.C., June 14, 2013.International Monetary Fund Managing Director Christine Lagarde speaks during a news conference at IMF headquarters in Washington, D.C., June 14, 2013.
x
International Monetary Fund Managing Director Christine Lagarde speaks during a news conference at IMF headquarters in Washington, D.C., June 14, 2013.
International Monetary Fund Managing Director Christine Lagarde speaks during a news conference at IMF headquarters in Washington, D.C., June 14, 2013.
VOA News
The International Monetary Fund is urging the United States to repeal large government spending cuts from earlier this year, saying they are a drag on economic growth.

In its annual review of the world's largest economy, the IMF said Friday that the reduction in the U.S. budget deficit in 2013 has been "excessively rapid and ill-designed." The IMF said the cuts, known as the sequester, should be replaced by longer-term reductions in government spending programs, as well as higher taxes.

Washington cut the federal budget by $80 billion in March after U.S. President Barack Obama and his Republican opponents in Congress were unable to agree on an alternative plan.

Despite the IMF's concerns, the Washington-based agency says the overall U.S. economy is improving. IMF chief Christine Lagarde said there are signs that the U.S. recovery is "gaining ground."

"In terms of outlook, we see that the recovery in the United States of America is gaining ground and becoming more durable. The housing market, the household balance sheets and the labor markets are generally doing better," said Lagarde. "The private sector is leading and easing financial conditions have helped; however, the economy has a way to go before it returns to full strength. Unemployment has fallen, but is still too high at about 7.6 percent and the effect of the sequester and deficit reduction more generally are already affecting the economy.''

The IMF says it expects U.S. economic fortunes to slow this year, down to 1.9 percent from 2.2 percent growth last year, before accelerating in 2014.

But the Washington-based agency said the American economy would have advanced this year by as much as one and three-quarters of a percentage point more if the sequester did not go into effect.

The American economy has been recovering sluggishly from the 2009 recession, and its chronic government budget deficits are declining.

You May Like

Turkey's Controversial Reform Bill Giving Investors Jitters

Homeland security reform bill will give police new powers in search, seizure, detention and arrests, while restricting the rights of suspects, their attorneys More

Audio Slideshow In Kenyan Prison, Good Grades Are Path to Freedom

Some inmates who get high marks could see their sentences commuted to non-custodial status More

'Rumble in the Jungle' Turns 40

'The Champ' knocked Foreman out to regain crown he had lost 7 years earlier when US government accused him of draft-dodging and boxing officials revoked his license More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Victorious Secularists Face Challenge to Form Government in Tunisiai
X
Henry Ridgwell
October 30, 2014 11:39 PM
Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.

All About America

AppleAndroid