Former Federal Reserve Chairman Alan Greenspan on Thursday backed a call for creation of a bipartisan commission to make the tough calls needed to cut the record federal deficit.
In testimony prepared for delivery before the Senate Homeland Security Committee, Greenspan warned that the United States faces the threat of an unprecedented "fiscal crisis" because of record red ink.
Greenspan called a proposal by Democratic Senator Kent Conrad and Republican Senator Judd Gregg for a bipartisan task force on deficit reduction "an excellent idea."
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"I trust any such taskforce will address the very thorny issue of the asymmetrical consequences of too much or too little fiscal restraint," Greenspan said.
The homeland security committee is examining the proposed commission amid mounting public concern about the record deficit.
The 18-member commission would weigh tax increases, spending cuts and other approaches needed to prevent the ballooning national debt — currently at $12 trillion — from compromising the United States' long-term strength.
The commission — a tried-and-true Washington tactic for politicians to offload painful choices — could make it easier for lawmakers to sign off on unpopular measures like trimming retirement spending or raising taxes to get the budget back in line.
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