Remarks Federal Reserve Chairman Alan Greenspan made during congressional testimony on various economic issues:

ECONOMIC GROWTH: Greenspan said the economy delivered a solid performance in 2004 and so far in 2005 "activity appears to be expanding at a reasonably good pace."

INTEREST RATES: He repeated his puzzlement over why long-term interest rates, such as mortgage rates, have not been rising in conjunction with the Fed's six hikes of short-term rates beginning last June. But he said the mystery has become "less of a conundrum" because long-term rates have been rising in recent weeks.

BUDGET CONTROLS: Greenspan, as he has in the past, called on Congress to restore pay-as-you go budget rules that expired in 2002. Those rules require that any future increases in benefit programs or reductions in taxes be paid for by cuts in other government spending or tax increases. "Our budget position is unlikely to improve substantially in the coming years unless major deficit-reduction actions are taken," he said.

TAXES: Greenspan called the reduction of the double-taxation of stock dividends which Congress passed in 2003 a key move in making the tax code more supportive of economic growth. He said he would favor extending this tax break, which is due to expire at the end of 2008. But he said Congress should pay for it and the extension of other tax breaks by either cutting government spending or raising other taxes.

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