Washington ? Federal Reserve Chairman Alan Greenspan urged Congress Wednesday to move quickly to fix financing problems in Social Security and Medicare, arguing that delay only would make the country’s budgetary problems more severe.

Greenspan again endorsed the key part of President Bush’s Social Security overhaul to set up private accounts. But he said Congress needed to do other things to put Social Security and Medicare on a more sound financial footing given the impending retirement of 78 million baby boomers.

While saying that Congress should move quickly to consider possible benefit cuts for Social Security and Medicare before the baby boomers begin retiring, Greenspan — as he did a month ago — urged a go-slow approach to setting up Bush’s proposed private accounts.

The administration estimates those accounts will require about $745 billion in new borrowing during the next decade. Greenspan said it was difficult to judge what effect such increased borrowing would have on financial markets, and for that reason the government should move cautiously to keep from triggering higher interest rates.

“I think it is very important that you move gradually and see what the response is,” Greenspan said.

It remains entirely possible that the effect on interest rates would be “zero,” he said, but since that can’t be forecast with total confidence “cautious and gradual” would be the best approach.

Bolstering the administration’s drive to get a Social Security reform bill enacted this year, Greenspan warned that every year of delay would make fixing the problem harder, especially after the baby boomers began retiring.

“This is the mother of all issues,” House Majority Leader Tom DeLay said, as Republican congressional leaders conceded that they may not be able to win congressional approval of it this year.

Senate Majority Leader Bill Frist said Bush would have to take a lead in building support for private accounts, especially “when a lot of political figures want to run and hide and when you have a lot of people who say there’s no problem.”

In his testimony Wednesday, Greenspan repeated a warning he first made a year ago, saying he believed the government had promised more than it could deliver to the baby boomers now approaching retirement and saying that cuts in benefits would have to be considered.

“If existing promises need to be changed, those changes should be made sooner rather than later,” so that the baby boomers would have time to prepare for reduced benefits, Greenspan told the House Budget Committee.

Making promises of retirement benefits that cannot be delivered, Greenspan said, was “utterly inappropriate. It is unfair.”

Greenspan reiterated that he supported President Bush’s push for setting up personal retirement accounts by diverting up to 4 percentage points of payroll taxes into the new accounts.

Diverting the payroll taxes into the Social Security trust fund, he said, merely had allowed the government to run larger budget deficits.

Greenspan said that switching to the private accounts would be a way to bolster the nation’s low savings rate.

In his prepared testimony, Greenspan did not repeat the cautionary message he sent last month: Creation of the accounts should be done slowly to gauge the impact the increased borrowing that will be needed will have on financial markets.

“The one certainty is that the resolution of the nation’s unprecedented demographic challenge will require hard choices and that the future performance of the economy will depend on those choices,” Greenspan said.

The Fed chief said that unless growth in the huge benefit programs was restrained, these programs would require more and more government resources, rising from about 8 percent of the total economy currently to 13 percent by 2030.

“In the end, the consequences for the U.S. economy of doing nothing could be severe,” he said.