U.S. Treasury Secretary Lew States Budget Talks Require Revenue and Spending Options

U.S. budget negotiations must find a balance between spending and revenue adjustments to support the ongoing economic recovery, according to Treasury Secretary Jack Lew, who spoke in a live interview on CNBC Asia on Wednesday.

Lew emphasized the importance of a balanced policy approach during discussions between Republicans and Democrats regarding the current fiscal year’s budget, hoping to avert a repeat of the previous government shutdown. He stated, “A mix of balanced policies where they are talking about both revenue and spending options could lead to positive outcomes.”

He explained that the ideal solution involves a balanced approach which could vary in scale. This might include closing tax loopholes that target obvious abuses, increasing fees, or other measures to create a well-rounded package. Lew noted, “It’s obviously easier to develop something of smaller size than a more extensive plan.”

While Lew did not address the current strength of the dollar, which is anticipated to be impacted by the Federal Reserve’s potential tapering of its asset purchase program, he did highlight that any recovery in the U.S. economy should be supported by growth in Asia and Europe as well.

He remarked, “Demand growth is critical. U.S. growth cannot compensate for a lack of demand growth in Asia or Europe.”