Washington -- Federal Reserve chairman Alan Greenspan said quick measures are needed to reduce the nation’s mammoth budget deficit, including proposals that would trim future Social Security benefits.

Greenspan also said that if the recent tax cuts of 2001 and 2003 are made permanent, they should be offset with reductions in spending, much like the “pay-as-you-go” budget rules of the 1990s.

Appearing before the House Budget Committee this week, Greenspan pointed out that the most recent surge in the deficit given its present levels -- expected to be a record $521 billion this year -- is ominous because it comes less than a decade before the first wave of baby boomers begin drawing on Social Security in 2008.

"This dramatic demographic change is certain to place enormous demands on our nation's resources -- demands we almost surely will be unable to meet unless action is taken," Greenspan said in his remarks. "For a variety of reasons, that action is better taken as soon as possible."

Greenspan proposed several measures that would pare future Social Security benefits to retirees, including raising the ages at which retirement benefits are paid and changing the inflation measure used to index the payments.

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