The US needs a balanced, comprehensive approach to tackle its fiscal woes that should include a mix of spending cuts and revenue increases, the head of the International Monetary Fund said on Sunday.
"My view, personally, is that the best way to go forward is to have a balanced approach that takes into account both increasing the revenue, which means, you know, either raising taxes or creating new sources of revenue, and cutting spending," IMF Managing Director Christine Lagarde said in a pre-taped interview on CNN's State of the Nation, which aired on Sunday.
Lagarde discussed her views about Washington's impending "fiscal cliff," a combination of automatic spending cuts and tax increases that will simultaneously take effect in early 2013 if lawmakers cannot arrive at a deal.
President Barack Obama's administration and congressional leaders are still trying to negotiate a way to avoid the "cliff" of $600 billion in tax hikes and federal spending. Failure to do so could likely tip the US economy back into a recession. In her interview on CNN, Lagarde cited the "fiscal cliff" as the biggest threat to the US economy, saying America is more vulnerable to its own domestic troubles than to anything else happening in the Eurozone or China.