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Alan Greenspan, the Federal Reserve chairman, today rebutted many of President Bush's arguments in favor of big new tax cuts, saying that the economy probably does not need any short-term stimulus and warning that budget deficits could spiral out of control.

Mr. Greenspan did not attack the specifics of Mr. Bush's $674 billion tax-cutting package, but he cast doubt on the need for a stimulus proposal in the first place.

He also disagreed with the Bush argument that rising budget deficits have little link to higher interest rates. And he pointedly took issue with the administration's argument that the best way to balance the budget is by promoting faster growth.

"I am not one of those who is convinced that stimulus is desirable policy at this point," he told lawmakers at a hearing of the Senate Committee on Banking, Housing and Urban Affairs. "My own judgment is that fiscal stimulus is premature."

Because of Mr. Greenspan's enormous stature as a spokesman on economic issues, his comments today were a serious blow to the Bush administration.