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Deficit Reduction After Economy Improves: Gregg, Bayh

Two powerful lame-duck senators, who both support the tax bill compromise set for a Senate vote Monday, told CNBC Monday, that reducing the deficit will come after the economy gets moving forward, even though the tax bill will add billions to the federal deficit.

“This is a two-step dance, because we’ve got to take steps to get the economy moving,” said Sen. Judd Gregg (R-N.H.), who has served on the deficit-reduction commission and is a ranking member of the Senate Budget Committee. “In the long term is where the issue [deficit] is. That’s where the fiscal policy is such a disaster.”

Sen. Evan Bayh, (D-Ind.), was in complete agreement with his GOP colleague.

Bayh said: “This is not the time to have a tax increase on every American. Ben Bernanke[Federal Reserve chairman] is practically begging us to provide additional support for the economy that avoids an additional drag on the economy.”

The Senate is expected to approve a deal Monday to extend tax cuts for all Americans, including a controversial piece that doesn’t raise taxes on those earning $250,000 and more annually. Originally, President Obama was against extending the tax cuts for so-called wealthy Americans, and that change in his position has caused dissent in the Democratic Party.