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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: TigerPaw who wrote (38426)	2/25/2004 11:27:06 AM
From: tonka552000	Respond to of 89467

SOP

To: TigerPaw who wrote (38426)	2/25/2004 11:54:07 AM
From: T L Comiskey	Read Replies (2) \| Respond to of 89467

Greenspan urges Social Security cuts Fed chairman advises Congress on deficit reductionThe Associated Press Updated: 11:31 a.m. ET Feb. 25, 2004WASHINGTON - Federal Reserve Chairman Alan Greenspan urged Congress on Wednesday to deal with the country’s escalating budget deficit by cutting benefits for future Social Security retirees. Without action, he warned, long-term interest rates would rise, seriously harming the economy. advertisement Select a brokerCharles Schwab & Co.FidelityHARRISdirectMerrill Lynch DirectE*TradeScottradeTD Waterhouse In testimony before the House Budget Committee, Greenspan said the current deficit situation, with a projected record red ink of $521 billion this year, will worsen dramatically once the baby boom generation starts becoming eligible for Social Security benefits in just four years. He said the prospect of the retirement of 77 million baby boomers will radically change the mix of people working and paying into the Social Security retirement fund and those drawing benefits from the fund. “This dramatic demographic change is certain to place enormous demands on our nation’s resources — demands we will almost surely be unable to meet unless action is taken,” Greenspan said. “For a variety of reasons, that action is better taken as soon as possible.” CALENDAR Coming up Major economic indicators and events Tuesday, Feb. 24 - Consumer confidence (Conference Board) Wednesday, Feb. 25 - Existing home sales Thursday, Feb. 26 - Durable goods orders - New home sales Friday, Feb. 27 - GDP revision - Consumer sentiment (Michigan) MSNBC research Click here to see key economic indicators • Print this But while Greenspan urged urgency, Congress is unlikely to take up the controversial issue of cutting Social Security benefits in an election year. Greenspan, who turns 78 next week, said that the benefits now received by current retirees should not be touched but he suggested trimming benefits for future retirees and doing it soon enough so that they could begin making adjustments to their own finances to better prepare for retirement. Greenspan did not rule out using tax increases to deal with the looming crisis in Social Security, but he said that tax hikes should only be considered after every effort had been made to trim benefits. “I am just basically saying that we are overcommitted at this stage,” Greenspan said in response to committee questions. “It is important that we tell people who are about to retire what it is they will have.” He warned that the government should not “promise more than we are able to deliver.” While the country is currently enjoying the lowest interest rates in more than four-decades, Greenspan warned that this situation will not last forever. He said financial markets will begin pushing long-term interest rates higher if investors do not see progress being made in dealing with the projected huge deficits that will occur once the baby boomers begin retiring. “We are going to be confronted ... in a few years with an upward ratcheting of long-term interest rates which will be very debilitating for long-term growth,” Greenspan told the committee if the deficit problem is not addressed.