Volcker Urges Tax Hike if Congress Won’t Cut Budget
Federal Reserve Board Chairman Paul A. Volcker today urged Congress to raise taxes if it cannot go along with President Reagan’s proposals for spending cuts to reduce the federal budget deficit.
“If you can’t do it on the spending side, then do it on the revenue side,” Volcker said in an appearance before the Congressional Joint Economic Committee.
Reagan has repeatedly vowed that taxes will be raised only “over my dead body.”
Volcker said that reducing the $180-billion deficit by less than the $50 billion proposed by the President would threaten economic vitality, disappoint financial markets and push interest rates higher but that cuts of $50 billion or more could bring a reduction in interest rates of about 1 percentage point.
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