The Nation - News from Nov. 21, 1988

The government must soon raise taxes by up to $20 billion to avoid further erosion of the dollar and higher interest rates, Wall Street economist Henry Kaufman said. Kaufman, appearing on NBC-TV’s “Meet the Press,” said that if President-elect George Bush remained firmly opposed to any tax increase, “ . . . the dollar will weaken and it will put further pressure on the central bank (the Federal Reserve) to tighten monetary policy in order to stabilize conditions and in order to limit the inflationary impact.” Bush has said that taxes will not have to be raised to narrow the federal budget shortfall, which stood at $155 billion the end of September. Sen. Pete V. Domenici of New Mexico, ranking Republican on the Senate Budget Committee, said on the same TV program that Bush is getting “the bum’s rush” over the economy and should resist pressure to fight the deficit before he takes office.