Alan Greenspan may have retired as chairman of the Federal Reserve, but his insight is still in hot demand, so much so that Senate Republicans invited him to be their guest speaker at their weekly policy lunch.

FINANCIAL/Per his normal practice, Greenspan declined to tell reporters what he told the lawmakers behind closed doors, but that did not stop a few senators from spilling the beans.

New Hampshire Republican Senator Judd Gregg said the former Fed chief talked mostly about the need to address the long-term budget deficit, specifically the Medicare healthcare program for the elderly and those with disabilities. The U.S. deficit is expected to crest at more than $1.8 trillion in fiscal 2009 which ends Sept. 30.

On the economy, which has been in a recession since December 2007, Greenspan apparently offered a slightly brighter picture. That would match¬† what more and more economists are saying — that the recession is in the process of bottoming out and look for a recovery to take root in the current quarter.

“I think he thinks things are improving,” Gregg told reporters.

Greenspan offered some “encouraging thoughts, banks are better off than they were six months ago,” said Nebraska Republican Mike Johanns. “On housing, if I remember correctly, (Greenspan offered) some indication that things were bottoming out, but again I think that’s reflective of what others are saying.”