NEW YORK (CNN/Money) - Federal Reserve Chairman Alan Greenspan is set to deliver a tough speech on the federal budget deficit, according to a report Monday.

Greenspan is expected to say that deficits are in fact important to the nation's economic health and may offer ways to curb spending, Fortune magazine reports in issues due to hit newsstands on Feb. 2.

The speech will focus on deficits expected when baby boomers begin to retire, and may also focus on spending for Medicare, the federal health insurance program for the elderly.

"This is a message that neither the Republicans nor the Democrats will like," Fortune writer Anna Bernasek wrote in the story.

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The central bank chairman could deliver the speech next month when he gives his semi-annual testimony on monetary policy to Congress, Fortune said, adding that sources have told the magazine that when Greenspan talks privately about the deficit, he calls it "awful" and "quite frankly dangerous."

The deficit, which last year hit $374 billion, is expected to hit a record $500 billion in the current fiscal year. For more on the story from Fortune's Web site, click here.