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To: James Thompson who wrote (8278)	5/16/1999 3:37:00 PM
From: Jenne	Read Replies (2) \| Respond to of 19700

Treasury's Rubin Sees More Solid Growth, Low Inflation Ahead for the U.S. By David Ward U.S. Treasury's Rubin Says Broad Inflation Not on U.S. Horizon Washington, May 16 (Bloomberg) -- U.S. Treasury Secretary Robert Rubin said that U.S. economic statistics released Friday showing that the price U.S. consumers pay for goods and services rose at its fastest pace in nine years doesn't signal a broader rise in inflation in the U.S. ''My view is that as we look forward, the most likely scenario remains one of solid growth and low inflation,'' Rubin said on ABC's 'This Week.' The Consumer Price Index rose 0.7 percent last month, and the CPI core rate, which excludes food and energy costs, rose a larger-than-expected 0.4 percent, the Labor Department said Friday. That report triggered a drop in stocks, led by the Dow Jones Industrial Average, which fell 193.87 points, or 1.8 percent. Rubin said the U.S. economy remains healthy, posting ''robust'' growth, and he said he expects that trend to continue as long as U.S. policy-makers maintain ''sound'' fiscal policy. ''We're on a very good track and I think we can stay on that track,'' Rubin said. ''I don't think there's any reason we're not likely to continue good economic conditions as long as we stay on a sound path. We have to continue to make sound public policy decisions and maintain fiscal discipline.'' Substantial Surpluses Rubin said the U.S. will likely post ''substantial'' budget surpluses in coming years, and he urged policy-makers to use that money to reduce the national debt, which would help the U.S. maintain strong economic growth. Rubin warned that paying for tax cuts with those surpluses - - currently projected to total $2.6 trillion over the next 10 years -- would ''squander'' a chance to bolster U.S. economic growth. ''I think the key is whether we take advantage of what really is an historic opportunity and in effect institutionalize fiscal discipline by paying down public debt,'' Rubin said. ''Tax cuts are easy, and in some ways remain very popular, but the tough path, the path of fiscal discipline... is the strategic position we should take in terms of best promoting our economic health going forward,'' Rubin said. Rubin said the U.S. cannot remain the only major industrialized country to continue to post ''robust'' economic growth. In particular, he again urged Japan to take steps to spur its domestic economy. 'Not Healthy' ''As you look around the world, the only major economy that has robust domestic growth is the United States, and that is not healthy,'' Rubin said. ''Most importantly, I think it's critical that Japan get back on track.'' Rubin, who is leaving his post as Treasury Secretary in July and returning to his home in New York, said he hasn't decided what he'll do when he leaves office. ''I've got 11 fly rods; I'm going to do some fishing, I'm going to do some reading,'' Rubin said. He unequivocally ruled out running for political office. ''I don't know what I'm going to do, but I'm absolutely certain I would not run for elective office,'' he said. ©1999 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.