Cottarelli Says U.S. Budget Fix May Need More Than Spending Cuts

Reducing the U.S. budget deficit over the medium term may require more than just cuts in government spending, said Carlo Cottarelli, director of fiscal affairs at the International Monetary Fund.

“The magnitude of the fiscal adjustment in the U.S. is so large that it will be difficult to do only on the spending side,” Cottarelli said in an interview with Tom Keene on Bloomberg Television. Still, “the bulk of it will be on the spending side and should include reforms on entitlements.”

Cottarelli also that the fiscal account needs to be fixed “gradually, not all of a sudden because that would be bad for the economy.”

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