In contrast to the White House desire to keep tax rates steady for all but the country's wealthiest, Greenspan urges a rollback of the 2001 and 2003 tax cuts he implicitly backed at the time, The New York Times reported Saturday.
In doing so he has discounted the arguments of Republicans and even a few Democrats that such a move could threaten an already shaky economic recovery.
"I'm in favor of tax cuts, but not with borrowed money," Greenspan, 84, said. "Our choices right now are not between good and better; they're between bad and worse. The problem we now face is the most extraordinary financial crisis that I have ever seen or read about."
Greenspan led the Federal Reserve for 18 years until he retired in 2006.
Critics were quick to come down on Greenspan's proposal.
"Such a large tax increase in the middle of a period of sluggish economic growth would be a very bad idea," R. Glenn Hubbard said.
Hubbard was chairman of the White House Council of Economic Advisers from 2001 to 2003 and was an architect of the tax cuts.