Federal Reserve Chairman Alan Greenspan generally gets accolades for his public pronouncements. Yesterday he got a brickbat from Senate Minority Leader Harry M. Reid (D-Nev.), who blasted Greenspan as "one of the biggest political hacks we have here in Washington."
Reid ripped Greenspan during an interview on CNN's "Inside Politics." He said the Fed chairman has given President Bush a pass on deficits that have built up in the past four years and should be challenging Republicans on their fiscal policies, rather than promoting Bush's plan to introduce personal accounts into Social Security.
"I'm not a big Greenspan fan -- Alan Greenspan fan," Reid said when asked about the Fed chairman's testimony this week urging Congress to deal quickly with the financial problems facing Social Security and Medicare. "I voted against him the last two times. I think he's one of the biggest political hacks we have in Washington."
Reid said that when Bill Clinton was president, Democrats had confronted the deficit problem by enacting a tax increase in 1993, which helped bring about a balanced budget and strong economic growth later in the decade.
"Why doesn't he respond to the Republicans and tell them the big problem here is the debt that this administration [has] created?" he said. "We had a $7 trillion-dollar surplus when Bush took office. Now we have a $3 or $4 trillion-dollar deficit. That's, in fact, what Greenspan should be telling people."
A spokeswoman said the Federal Reserve would have no comment. Brian Jones, spokesman for the Republican National Committee, which a few weeks ago sharply attacked Reid, called the minority leader's comments regrettable.
"It's unfortunate that at a time when the president is looking to engage Congress in a substantive and meaningful discussion on Social Security that Harry Reid is spending his time attacking the Federal Reserve chairman," he said.
Reid's personal attack reflected Democrats' frustration over Greenspan's support for the key element of Bush's Social Security plan -- voluntary personal saving accounts for younger workers funded by diverting a portion of payroll taxes. Reid has led the Democrats in their united opposition to Bush's plan, and Reid spokesman Jim Manley said Greenspan's congressional testimony on Wednesday amounted to "shilling for the president with proposals that would put us deeper in debt."
Greenspan has occupied an unusual position in Washington during his long tenure at the Fed: above partisan criticism, a figure celebrated by many as a wise and evenhanded guardian of the economy whose public pronouncements not only move markets but also greatly influence policy debates. But in recent years, he has opened himself to more criticism. Having supported tax cuts when Bush was pushing them in 2001 and now backing personal accounts for Social Security, he has become a target for Democrats.
As Reid made clear in his interview with CNN's Judy Woodruff, he has been a longtime critic of Greenspan. In 1996, Reid opposed a third four-year term for Greenspan and ordered a General Accounting Office report critical of the Fed's management. He described Greenspan and the Federal Reserve Board as "arrogant."
Reid also differed with Greenspan on monetary policy, arguing that he was keeping interest rates too high. "We should put the brakes on Mr. Greenspan's nomination before we once again empower him with the ability to put the brakes on the economy," he said then.
In his first months as successor to former senator Thomas A. Daschle (D-S.D.), Reid has proven to be a pugnacious and sometimes unpredictable leader. He has given the administration no quarter, and his comments sometimes have caused an uproar among fellow Democrats.
Shortly after winning the leadership post, Reid suggested to NBC's Tim Russert that he might vote for conservative Supreme Court Justice Antonin Scalia if Bush were to nominate him to be chief justice. Other Democrats and abortion rights advocates jumped on Reid, who opposes abortion rights.
Research editor Lucy Shackelford contributed to this report.