Democratic presidential contender Howard Dean said on Friday that US Federal Reserve chairman Alan Greenspan had become too political and should be replaced, broaching a subject on which his opponents have been largely silent.
"I think Alan Greenspan has become too political," Dean said in response to a question from the audience at a town hall meeting.
"If he lacks the political courage to criticize the [budget] deficits, if he was foolish enough -- and he's not a foolish man -- to support the outrageous tax cuts that George Bush put through, then he has become too political and we need a new chairman of the Federal Reserve," he added.
"Greenspan has been an excellent chief, and yet in the last couple of years, I've been deeply troubled by his willingness to accede to positions that I don't think are in the best interest of the country," Dean later told reporters.
"I'm troubled by his willingness to bend in political winds. That's something a Fed chief should never do."
Greenspan is highly regarded in financial markets and closely associated in the public's eye with the record 10-year US economic expansion that ended in early 2001.
Although Greenspan backed the notion of tax cuts in early 2001, he has consistently warned of the dangers of high budget deficits. He has also on numerous occasions voiced a preference for tax cuts over spending increases.
Many analysts believe Greenspan's tax-cut views helped US President George W. Bush win congressional approval for an initial tax reduction package totaling US$1.35 trillion over 10 years. In all, since taking office, Bush has won tax cuts that add up to some US$1.7 trillion.
The tax cuts -- which the administration is now pressing to make permanent -- and an economic slowdown helped fuel a record US$374 billion budget gap last year, or about 3.5 percent of US GDP, the highest proportion since 1993. The White House expects the deficit to hit about 4.5 percent of GDP this year.
In some ways, Dean's criticism is academic.
At a news conference in Nashua, New Hampshire, later on Friday, Dean explained he was not calling for Greenspan to be ousted before his term ended but that if he were elected president he would not reappoint him.
Under the law, he would not be able to reappoint Greenspan even if he wanted.
While Greenspan's term at the helm of the central bank expires on June 20, Bush said last April the 77-year-old chairman should get another four-year term and Greenspan said he would serve if nominated and confirmed by the Senate.
But even if Greenspan is renamed to the post this year, the winner of the November presidential election will almost certainly need to name a new chairman.
That is because Greenspan's separate term as a member of the Fed's board ends on Jan. 31, 2006, and he cannot be renominated since he would have already served the one full 14-year term permitted. When he first took office as Fed chairman in 1987, he filled an unexpired term, before being appointed to the full term.
Aides to Democratic presidential hopefuls Senator Joseph Lieberman of Connecticut and retired General Wesley Clark said their candidates would turn to someone like former Treasury Secretary Robert Rubin, who served under President Bill Clinton, if faced with the task of naming the next Fed chief.
The campaigns of Dean's other major Democratic rivals -- Sens. John Kerry of Massachusetts and John Edwards of North Carolina -- did not comment.
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