With the risk of a national debt crisis lurking over the nation, former Federal Reserve chairman Alan Greenspan can't agree with continuing vast tax cuts for America's richest taxpayers.
Appearing on MSNBC's Meet The Press on Sunday, Greenspan was trenchant, saying that Bush-era tax cuts, extended last year by the Obama administration, must be allowed to expire with the federal deficit, once tomorrow's problem, quickly developing into a threat to today's economy.
"I think this crisis is so imminent and so difficult that I think we have to allow the so-called Bush tax cuts all to expire," Greenspan said. "That is a very big number," he continued, adding that taxes should return to the higher levels instituted by the Clinton administration in the 1990s not just for the wealthiest taxpayers, but for all Americans.
Last November, the Obama administration accepted an across-the-board, temporary continuation of steep Bush-era tax cuts, including those for the wealthiest taxpayers, largely to protect middle-class tax payers also included in the legislation. The estimated cost of just the portion of the tax cuts that would apply to the richest Americans is $42 billion this fiscal year, more than the $38 billion value of the savings from the federal budget cuts lawmakers approved last week.
On Wednesday, in an attempt to address the nation's mounting federal debt crisis, President Barack Obama outlined a 12-year, $4 trillion deficit-reduction plan. As the U.S. approaches the $14.3 trillion debt ceiling, which the Treasury Department estimates will be hit by May 16, Treasury Secretary Timothy Geithner said he expects Congress to increase the debt limit, allowing the country to borrow more money.
During the same broadcast on Sunday, Geithner reiterated his confidence that certain congressional lawmakers would come together to raise the nation's debt limit, labeling it "absolutely essential to [preserving] the creditworthiness of the United States of America" and warning of dire consequences if politicians couldn't get the deal done.
"If you allow people to start to doubt whether the United States of America will meet its obligations, that would be catastrophic," Geithner continued. "[W]e can't take that risk."