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. Last Updated: 07/27/2016

Snow: Bush Is Serious About Cutting Deficit

WASHINGTON -- The U.S. administration is committed to cutting huge budget and trade deficits, U.S. Treasury Secretary John Snow said, adding there should be no delay in overhauling Social Security.

However, Snow, appearing on CNBC television, declined to say whether Federal Reserve chairman Alan Greenspan is pressing the administration for swifter action to ratchet down deficits.

"I won't get into our discussions with Chairman Greenspan, that wouldn't be appropriate," Snow said.

"But I will say that this administration is deeply committed to fiscal responsibility, to controlling spending and to bringing the deficit down."

The New York Times cited what it said were rumors that Greenspan warned the White House in mid-December that it had to take more credible steps to demonstrate its intent to cut the record budget deficit in half by 2009.

Snow said it was necessary to introduce changes to the Social Security reform system without delay, adding that failing to do so would mean "either huge tax increases or major benefit changes" ahead.

President George W. Bush has identified amending the Social Security retirement program to include setting up private investment accounts as a priority for his second term. So far, no specific plan has been presented and Snow said the intent now was to "get a broad dialogue" started on changing the 70-year-old retirement program.

"We don't have a proposal yet," he said. "We're laying out the problem."

He said Bush, who is expected to deliver his annual State of the Union address to Congress next week, will offer more detail on the issue. Democrats and advocacy groups including the influential American Association of Retired People deny there is a crisis, and note the Social Security Trust Fund is expected to meet all of its obligations for at least another 40 to 50 years.

On other matters, Snow said he remained confident the U.S. economy was poised for steady growth.

"I think the economy's basic fundamentals are really excellent -- high productivity, low inflation, low interest rates -- and all of that augurs well for continued expansion of the economy at rates well above the long-term trend line."