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UPDATE 1-Obama administration says closing tax loopholes 'crucial'

Thursday, 24 Oct 2013 | 9:50 AM ET

WASHINGTON, Oct 24 (Reuters) - The Obama administration on Thursday said it was "crucial" to close wasteful loopholes in the U.S. tax code so the government could invest more in manufacturing and education.

The remarks by Treasury Secretary Jack Lew helped set guideposts for the administration's priorities in upcoming budget negotiations.

"We should craft a budget agreement that propels growth and hiring while maintaining fiscal discipline," Lew told a policy conference.

"It is crucial that we close wasteful tax loopholes," he said, adding that this would give the government more to spend on schools and other infrastructure.

While Lew did not say which loopholes should be closed, such a strategy could raise government revenues without increasing tax rates.

Many conservative Republicans are opposed to increasing revenues, although closing loopholes could make such a policy easier to swallow.

Lew also repeated the administration's view that automatic budget cuts that took effect in March should be canceled.