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Greenspan : 'we lost control of
deficit'
US deficit control gets 'lost' in translation
Gary Duncan In Washington
September 26, 2005
IRRITATED American officials yesterday sought to play down claims that Alan
Greenspan had said Washington had "lost control' of its budget
deficit.
Thierry Breton, France's Finance Minister, speaking to reporters in
Washington, made the claim after a closed-door meeting with Mr Greenspan, the
Federal Reserve Chairman, and John Snow, the US Treasury Secretary.
" ‘We have lost control', that was his expression,'
M Breton said as he outlined the Fed Chairman's private comments.
A senior US official suggested the French minister must have misunderstood
Mr Greenspan's remarks. "Things can get lost in translation,'
the official said.
The US Treasury also rejected any suggestion that the deficit was out of
control. "This administration is absolutely committed to the
President's goal of halving the deficit as a percentage of GDP by 2009
and we have every expectation of meeting that goal,' a spokesman
said.
The shortfall of tax revenues over public expenditure is expected to be
about $400 billion (£215 billion) this year, boosted by the unexpected
cost of rebuilding after hurricanes Katrina and Rita.
The Federal Reserve refused to comment on M Breton's reports of its
Chairman's views.
Earlier, the French minister said that both he and Mr Greenspan had
expressed disappointment "that the management of debt is not a political
priority today'. "The United States has lost control of its budget
at a time when racking up deficits has been authorised without any control
(from the US Congress),' M Breton said.
The controversy came as ministers from the Group of Seven leading economies
said reductions in the US budget deficit were a key part of easing the global
economic imbalances that could jeopardise world growth.
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