Cliff averted, now what?

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WASHINGTON, Jan. 2 (UPI) -- Business leaders and deficit-reduction hawks say the "fiscal cliff" deal passed by the U.S. Congress is positive because it averts tax hikes, but falls short.

U.S. Chamber of Commerce President Thomas J. Donohue said the deal passed Tuesday "does not even begin" to address the fiscal challenges facing the country, the Los Angeles Times reported Wednesday.

"The new Congress and the administration must begin work immediately to slow runaway spending through structural entitlement reforms," Donohue said Wednesday, adding that policy-makers needed to spur economic growth by revamping the tax code and pumping up U.S. energy production.

The Business Roundtable, a group of corporate chief executives, said President Obama and Congress only scratched the surface of the nation's fiscal woes by pulling back from the confluence of steep tax increases and deep government spending cuts that would have gone into effect if the fiscal cliff bill hadn't passed.

"When pressed to the limit, political leaders averted some of the most immediate negative consequences of the short-term fiscal cliff, but left unaddressed the most serious and fundamental reforms required for the country's long-term economic health," the roundtable said. "We hope political leaders will now work continuously to agree on market-credible structural fiscal and spending reforms needed for America to compete in a modern global economy."

The deal raises tax revenue by $620 billion over the next 10 years, mainly by allowing tax rates to rise on annual income of more than $450,000 for households and $400,000 for individuals, among other things. However, the deal did not address spending, delaying the automatic spending cuts, or sequesters, for two months.

The Campaign to Fix the Debt, a coalition that also includes top business officials, said the compromise was "a small step forward" in deficit-reduction efforts, the Times said .

But the situation also was a "missed opportunity to do something big to reduce our long term fiscal problems," said the group's co-founders, Erskine Bowles and Alan Simpson, who led Obama's deficit reduction commission.

"Washington missed this magic moment to do something big to reduce the deficit, reform our tax code and fix our entitlement programs," they said.

A short-term deal was necessary to "protect the fragile economic recovery in the short term," Michael A. Peterson, chief operating officer of the Peter G. Peterson Foundation, a deficit-reduction advocacy group, said, adding that more needs to be done.

"The goal of any sustainable fiscal policy must be to stabilize the debt as a share of the economy and put it on a downward path," Peterson told the Times. "Until we have a plan that stabilizes our federal debt, uncertainty and lack of confidence will continue to be a drag on our current economy and threaten our future prosperity."

Obama spoke in the White House briefing room soon after the House passed the bill.

"Thanks to the votes of Democrats and Republicans in Congress, I will sign a law that raises taxes on the wealthiest 2 percent of Americans while preventing a middle-class tax hike that could have sent the economy back into recession and obviously had a severe impact on families all across America," Obama said, as Vice President Joe Biden, who negotiated the deal with Senate Minority Leader Mitch McConnell, stood behind him.

Obama said he would like to take additional steps to reduce the nation's deficit.

"The one thing that I think, hopefully, in the new year we'll focus on is seeing if we can put a package like this together with a little bit less drama, a little less brinkmanship, not scare the heck out of folks quite as much," he said.

Obama left Washington to resume his family vacation in Hawaii. He arrived there early Wednesday.

The New Year's Day bill defers the ballooning cost of healthcare and cuts the deficit by $600 billion instead of the $4 trillion Obama and congressional leaders said they wanted to negotiate.

Obama left to return for Hawaii around midnight to resume his family vacation he interrupted to return to Washington after Christmas for talks. He arrived early Wednesday.

It was not immediately clear when Obama would sign the measure.