Greenspan message sparks controversy

In an election year, a call for cuts in Social Security makes both parties jumpy.
WASHINGTON (AP) -- Federal Reserve Chairman Alan Greenspan's latest call for benefit cuts in Social Security and Medicare for future retirees touched off a frenzy among politicians in both parties already hypersensitive about the November elections.
Greenspan told Congress on Wednesday that soaring budget deficits from out-of-control entitlement programs could lead to a "very debilitating" rise in interest rates and threaten the economy in coming years.
It was not a new position for the central bank chairman, who regularly reiterates the recommendations that are essentially the same ones made by a bipartisan commission on Social Security he headed two decades ago.
But his remarks touched an election-year nerve with members of the House Budget Committee already at odds over President Bush's economic program, particularly large tax cuts that he wants to make permanent.
Candidates' reactions
Democratic presidential candidates quickly denounced Greenspan's proposals while Bush and other Republicans sought to distance themselves from his latest remarks.
Democratic front-runner Sen. John Kerry said the way to address the deficit was to roll back tax cuts for the wealthy and "the wrong way to cut the deficit is to cut Social Security benefits. If I'm president, we're simply not going to do it."
Sen. John Edwards, D-N.C., called it "an outrage' for Greenspan to call for cuts in Social Security while at the same time endorsing making Bush's tax cuts permanent.
Bush said Social Security benefits "should not be changed for people at or near retirement."
Underscoring the view that Congress is not about to touch Greenspan's suggestions in an election year, Rep. Clay Shaw, the Republican chairman of the Ways and Means subcommittee in charge of Social Security, said: "My message to seniors and those nearing retirement: You will receive nothing less than 100 percent of what you've been promised. Your benefits are safe and secure."