The International Monetary Fund has said that the Bush administration's plans to halve the US fiscal deficit over four years are too modest and called for tax increases to tackle longer-term fiscal problems.

In its annual report on the US economy, the IMF said that even if the administration's target of halving the deficit over four years was achieved, the deficit and government debt would still be too high in the face of the added burden on Social Security and Medicare created as “baby boomers” start to retire.