Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Greenspan: Let Bush tax cuts expire

bush_greenspan.gi.top.jpgFormer Fed chairman Alan Greenspan, left, at President George W. Bush's announcement of his successor, Ben Bernanke, in October 2005. By CNNMoney.com staff


LONDON (CNNMoney.com) -- Former Federal Reserve chief Alan Greenspan believes Congress should let the tax cuts enacted by President George W. Bush expire for all Americans in order to address the widening deficit, according to a TV interview airing Friday.

"They should follow the law and let them lapse," Greenspan told Bloomberg TV's Judy Woodruff.

The 2001 and 2003 tax cuts are due to expire at the end of the year. President Obama had promised to make them permanent for families making less than $250,000. (Read 'Bush tax cuts up in the air')

But faced with growing fiscal challenges, there's debate in Washington about whether the country can afford to permanently extend the tax cuts.

Greenspan, who backed the tax cuts when they were enacted, told Woodruff that allowing the cuts to lapse "probably will" slow growth, but that the risk posed by doing nothing about the deficit is greater.

"I think we misunderstand the momentum of this deficit going forward," the former Fed chairman said in the interview. To top of page

Index Last Change % Change
Dow 16,654.77 369.26 2.27%
Nasdaq 4,812.71 115.17 2.45%
S&P 500 1,987.66 47.15 2.43%
Treasuries 2.17 -0.00 -0.18%
Data as of 6:23pm ET
Company Price Change % Change
Bank of America Corp... 16.44 0.38 2.37%
Freeport-McMoRan Inc... 10.19 2.27 28.66%
Apple Inc 112.92 3.23 2.94%
General Electric Co 25.01 1.00 4.16%
Microsoft Corp 43.90 1.19 2.79%
Data as of 4:03pm ET
Sponsors

Sections

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Smartphones are expensive. So using the one your employer gives you can save a lot of money. But in exchange you may be forfeiting control and privacy. More