–Former Federal Chairman Says U.S. Fiscal Situation is ‘Precarious’
–Should ‘Rescind’ The Bush Era Tax Cuts
–Should ‘Go Back To Tax Structure’ Before 2001
–Tax Expenditures ‘Should Not Exist In Our Fiscal System’
By John Shaw
WASHINGTON (MNI) – Former Federal Reserve Board Chairman Alan
Greenspan painted a grim picture of the U.S.’s fiscal position Tuesday,
calling the nation’s fiscal posture “precarious” and saying the nation
faces a “very long road” to return to fiscal stability.
In a question-and-answer session with a subcommittee of the Senate
Finance Committee on budget and tax issues, Greenspan said Congress’s
new deficit reduction panel should secure $4 trillion in budget savings
over a decade “at a minimum.” The panel has been charged to identify
$1.5 trillion in savings.
Greenspan said the U.S. should “go back to the tax structure” of
2000 and “allow all of the Bush tax cuts to be rescinded.”
He added that given the nation’s current fiscal situation, he would
oppose additional tax cuts that are paid for by borrowed funds.
“I don’t think, at the end of the day, that works,” Greenspan said.
He said that the “very first thing we should address is to get the
deficit down.”
Greenspan said entitlement reforms are critical to control the
growth of federal spending.
He made an impassioned case for bringing more stability and
certainty to the tax code, saying that it is harmful to have a tax code
that is “constantly subject to change.”
Greenspan said he believes that policymakers should “get rid of the
whole concept” of tax expenditures. These are the $1 trillion in annual
credits and deductions that are part of the tax code.
“I’m one of those…who thinks that all tax expenditures should not
exist in our fiscal system,” he said.
Greenspan said he sees a sluggish American economy for some time to
come, adding he sees “no real potential for changing that materially” in
the short term.
** Market News International Washington Bureau: (202) 371-2121 **
[TOPICS: M$U$$$,MFU$$$,MCU$$$]
