WASHINGTON -- The economy would be hurt if the Republican-controlled Congress tries to dismantle the Clinton Administration's deficit reduction plan that was enacted in 1993, Treasury Secretary Lloyd Bentsen said yesterday.

"There's no sense in repeating mistakes on the budget ... the '81 tax bill that created the budget problem was complete with overly optimistic assumptions," he said here in a speech to the National Press Club.

"We've come too far in cutting this deficit to turn around and start cooking the books," he said.

In response to questions following the speech, Bentsen said the Clinton Administration would "take all the credit it can" for the robust economy, which he said had created over five million jobs in the last 22 months.

However, he declined to respond to a question asking whether he agreed with the Federal Reserve's policy of increasing short-term interest rates to curb the threat of inflation.

Several congressional leaders, including incoming Senate Majority Leader Bob Dole, R-Kan., and incoming House Speaker Newt Gingrich, R-Ga., have said they intend to cut taxes in the new Congress.

Bentsen agreed with several economists who have criticized proposals to cut taxes when there is little room left in the budget to include offsetting spending cuts. "The problem is paying for it. It's imperative we don't lose the gains we've made with deficit reduction," he said.

He was quick to point out that the administration hasn't completed its fiscal 1996 budget deliberations and that many decisions -- on such things as a middle class tax cut -- have not been made. The administration's budget is due to be sent to Congress on Feb.6.

Bentsen's speech came amid fresh reports that he is about to resign as Treasury secretary, but he termed the reports inaccurate.

There has been speculation here on when the 73-year-old Bentsen would retire ever since he was named Treasury secretary 22 months ago. "To paraphrase from Mark Twain, the news is premature," he said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.