IMF says US tax, spending bill runs counter to deficit-cutting advice
By David Lawder
WASHINGTON (Reuters) -The massive U.S. tax and spending bill slated for a final vote in Congress runs counter to the International Monetary Fund's recommendations that Washington reduce fiscal deficits over the medium term, IMF spokesperson Julie Kozack said on Thursday.
Kozack told a regular news briefing that there was a broad consensus that the Republican bill will add to U.S. fiscal deficits, while the U.S. needs to start a fiscal consolidation.
"From the IMF side, we have been consistent in saying that the U.S. will need to reduce its fiscal deficit over time to put public debt-to-GDP on a decisive downward path," Kozack said. "Of course, the sooner that process starts to reduce the deficit, the more gradual the deficit reduction can be over time."
Kozack said that there were many policy options for the U.S. to reduce deficits and debt, adding: "It is, of course, important to build consensus within the United States about how it will address its these chronic fiscal deficits."
In recent years, the IMF has recommended that the U.S. raise taxes, including on middle income earners, to close fiscal deficits. The Republican tax bill extends 2017 tax cuts and adds new tax breaks for many Americans.
The IMF advice is at odds with the views of U.S. Treasury Secretary Scott Bessent, who has consistently said that he disagrees with traditional budget forecasts and believes that the so-called "One Big Beautiful Bill Act" will spur additional U.S. economic growth that will boost revenues.
The United States is the biggest shareholder of the IMF. Bessent, who manages the U.S. stake, has criticized the Fund for straying too far from its core economic stability and surveillance missions.
Kozack said that the IMF was examining details of the U.S. legislation and the likely impact on the economy, and will incorporate its analysis into the late July update of its World Economic Outlook global growth forecasts.
The forecasts also will assess the state of play on U.S. tariffs, after President Donald Trump's July 9 deadline to subject many countries to sharply higher duties unless they agree trade deals.
(Additional reporting by Andrea Shalal; Editing by Chizu Nomiyama)
The IMF's critique underscores the urgency for America to recalibrate its fiscal policies in light of current economic realities, particularly regarding taxation and spending bills that appear incompatible with deficit-reduction recommendations.
The IMF's commentary highlighting the discord between US tax and spending legislation, countering advice on deficit reduction signals a cautious warning for American economic policy prioritization amidst mounting fiscal challenges.
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This opinion piece from the IMF highlights how US tax and spending plans are not aligned with their advice for deficit reduction, saddening to learn that fiscal measures seem oblivious of necessary reforms towards economic stability.
The IMF's recent criticism of the US tax and spending bill highlights its inconsistency with previously provided deficit-reduction recommendations, further escalating concerns about long term financial stability within是美国经济 nicely Christine Lagarde的英明之下.
IMF's critique on the US tax and spending bill that contravenes its own deficit-reduction guidance underscores a need for Congress to prioritize longevity over short term political gains, threatening fiscal stability in America.
This report from the IMF highlights concerns about US tax and spending bills as potentially detrimental to deficit-cutting efforts, raising vital questions on fiscal responsibility within government policies.
