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To: pallmer who wrote (4705)	1/10/2003 10:31:45 AM
From: pallmer	Respond to of 29600

-- Fed's Gramlich: should balance budgets over time -- NEW YORK, Jan 10 (Reuters) - Federal Reserve Board Governor Edward Gramlich said on Friday U.S. fiscal policy, which may be headed to mark a record budget deficit this year, should strive to keep the federal books balanced over time. But Gramlich said he did not want to get into a political debate over President George W. Bush's latest $674 billion tax cut plan released earlier this week. "For me, for fiscal policy an appropriate anchor would be over some horizon that we ought to strive for budget balance," Gramlich told an event sponsored by the Directors' Roundtable for business school alumni. Gramlich did not discuss current economic conditions or the outlook for interest rates. Gramlich said although fiscal policy could respond to economic events in the short-run by raising or lowering the budget deficit, this should be done consistent with a goal to balance the budget over the long-term. Many analysts say if the latest tax cut proposals are passed by Congress the budget deficit this year will top $300 billion, passing the prior record of $290 billion in 1992. Gramlich said monetary policy, like fiscal policy, needed a long-term anchor, citing as an example some foreign central banks, which have chosen a flexible inflation-targeting regime. ((Reporting by Victoria Thieberger; Reuters Messaging victoria.thieberger.reuters.com@reuters.net; +1 646 223 6300)) (C) Reuters 2003. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world. nNAT001001 10-Jan-2003 15:29:27 GMT Source RTRS - Reuters News