Obama campaign seizes on Greenspan's tax comments

CHICAGO (Reuters) - Presidential candidate Barack Obama's campaign on Saturday seized on comments from former Federal Reserve Chairman Alan Greenspan, who questioned the affordability of broad new tax cuts.

Greenspan told Bloomberg News he was "not in favor of financing tax cuts with borrowed money" when asked if the United States could afford big tax cuts such as those proposed by Republican John McCain.

Noting that McCain has in the past expressed strong admiration for Greenspan, a fellow Republican, the Obama campaign said the former Fed chief's comments were evidence that McCain's economic plan was fiscally reckless.

"John McCain has said his professor and mentor is Alan Greenspan. And that's why Alan's comments yesterday are so very important," Obama economic adviser Laura Tyson told reporters in a conference call.

"He's saying, 'Look, these numbers just don't add up and it's not good for the U.S. economy to finance large tax cuts with borrowed money.'"

During Greenspan's tenure at the Fed, McCain once joked that his role in inspiring confidence in the economy was so vital that if the Fed chief were to die in office he would put dark sunglasses on him and "prop him up" as was done to a deceased character in the 1989 movie "Weekend at Bernie's."

McCain has also suggested he would lean heavily on Greenspan's book, "The Age of Turbulence," for advice on economics should he win the White House.

McCain, locked in a close race against Obama ahead of the November 4 election, has pledged to keep in place the tax cuts pushed by President George W. Bush.

McCain, an Arizona senator, has also proposed a broad cut in corporate taxes and says he would help pay for it by ridding the budget of wasteful government spending.

Obama has proposed rolling back the Bush tax cuts on the wealthiest Americans while offering middle-class families a tax cut.

Greenspan, known for a strongly free-market bent, has often said he believes in low taxes but wants lawmakers and the White House to follow so-called "pay-go" rules that require tax reductions to be paid for out of budget cuts.