- WASHINGTON (AP) -- Federal
Reserve Chairman Alan Greenspan said Thursday that Congress should make
President Bush's tax cuts permanent and cover the $1 trillion price by
trimming future benefits in Social Security and other entitlement programs.
Greenspan was asked how he would come up with the decade-long cost of $1
trillion to pay for extending the 2001 and 2003 individual tax cuts. "I
would argue strenuously that it should be taken out on the expenditure
side," he answered.
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- Greenspan, chairman of a commission that recommended
solutions to a Social Security funding crisis in 1983, said he has felt
for a long time that the promised program benefits greatly outweighed the
government's ability to pay for them.
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- He recommended two items for study in terms of trimming
benefits: linking the retirement age to the population's longer life spans
and tying annual cost of living benefits in Social Security to a less-generous
inflation index than the Consumer Price Index.
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- Greenspan came out in support of the administration on
the idea of permanent tax cuts, even in the face of deficits estimated
to reach a record $521 billion this year.
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- At a critical point three years ago, the Fed chairman
also endorsed the president's first tax cut, at a price of $1.35 trillion,
as a good way to handle surpluses that were then projected to total $5.6
trillion over the next decade.
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