Darman Declines to Rule Out Need for Tax Hikes Next Year

Although the Bush Administration is not looking at any tax increases next year, Budget Director Richard G. Darman refused Saturday to rule out the possibility if further cuts in the budget deficit are not achieved.

On CNN’s “Evans & Novak” program, Darman made it clear that he intended to reduce the deficit without a tax increase and said that raising taxes was “not on the table.”

However, he did not rule out the possibility. “We’re going to have to cut more than the budget compromise has done in order to avoid tax increases,” Darman said.

Before adjourning last Wednesday, Congress approved a series of deficit-cutting bills that meets spending and revenue targets without coming to grips with major deficit problems.

President Bush is scheduled to submit his budget for fiscal 1991 to Congress on Jan. 8.

Darman dodged making comments on the Federal Reserve Board, which has been easing interest rates in the face of a slowing U.S. economy, although he appeared to stand by his previous criticism.

“I’ll just incorporate by reference the remarks I made last time,” he said.

In the past the budget chief has been highly critical of the Fed’s tight policies, which the Administration fears will put the brakes on the longest running economic expansion in U.S. history.