Greenspan: Make Bush Tax Cuts Permanent
AP ^ | Thu Feb 12,10:56 PM ET | By MARTIN CRUTSINGER, AP Economics Writer




WASHINGTON - Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) said Thursday that Congress should make President Bush (news - web sites)'s tax cuts permanent and cover the $1 trillion price by trimming future benefits in Social Security (news - web sites) and other entitlement programs.

Greenspan told the Senate Banking Committee that Congress, "as a first order of business," should restore budget rules that cap discretionary government spending and require increases in entitlement benefits or cuts in taxes to be offset by other program cuts or other tax increases.

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.

Greenspan, chairman of a commission that recommended solutions to a Social Security funding crisis in 1983, said he has felt for long time that the promised program benefits greatly outweighed the government's ability to pay for them.

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 (news - web sites).