Fiscal deal good, but big risks still face U.S. economy: Flaherty

OTTAWA – Canada’s finance minister says the U.S. economy still faces significant risks despite a last-minute deal to keep income taxes from rising on the middle class and the poor.

While Jim Flaherty is welcoming the agreement to avoid the so-called fiscal cliff, he says the United States isn’t out of the woods yet.

He says he hopes congressional leaders can keep working together to set the country on a sustainable path.

Congress has been deeply and bitterly split over the fiscal deal for months.

Had an agreement not been reached, economists warned that tax increases for most Americans could have sent the country spiralling back into recession.

The agreement reached late Tuesday night includes a tax hike for Americans earning more than $400,000 a year and couples earning $450,000 or more, while preserving middle-class tax cuts that were to expire in 2013.