Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 13, 1990 TAG: 9005130132
SECTION: VIRGINIA PAGE: B-10 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: HOT SPRINGS LENGTH: Medium
He did say the administration favors "user fees" over taxes as a way of raising revenue. The beneficiaries of services should be the first to pay for them, he said.
Boskin, chairman of the Council of Economic Advisers, appeared before the Business Council at The Homestead to discuss the economy and the environment.
No preconditions have been set for the deficit-reduction talks between the president and Congress that are set to begin Tuesday, Boskin said. Nothing has been laid on or removed from the negotiating table, he added.
Nevertheless, several of the top business executives attending the meeting say they expect new taxes to be part of a deficit-reduction agreement.
And, generally, the businessmen were cautiously optimistic about the negotiations.
A deficit-reduction package must strike a balance between spending cuts and revenue increases, said Citicorp chairman John S. Reed, expressing a recurring sentiment. "We're paying higher taxes now; it's called higher interest rates."
But Reed also said, "I doubt seriously that they're going to agree to anything that is dramatic."
While the economy is performing well, interest rates are higher than expected and corporate profits lower, Boskin said. That could make the deficit larger and make any mandatory cuts in the budget in the fall larger, he said.
The Bush administration would rather negotiate those cuts, he said.
Boskin said the administration's best-case forecast for the economy agrees with the one released by the Business Council on Friday. That forecast ruled out a recession through next year and predicted growth in the 2 percent to 2.5 percent range; but Boskin cautioned the economy could do better or worse.
The Washington Post contributed some information for this story.
by CNB