News / USA

Bernanke Warns US Congress Against Cutting Too Much Too Soon

U.S. Federal Reserve Chairman Ben Bernanke testifies at a Joint Economic Committee hearing on Capitol Hill, Washington October 4, 2011.
U.S. Federal Reserve Chairman Ben Bernanke testifies at a Joint Economic Committee hearing on Capitol Hill, Washington October 4, 2011.

The chairman of the U.S. central bank is warning lawmakers not to cut government spending too sharply too soon, saying it could further harm the economy.

Federal Reserve Chairman Ben Bernanke testified before Congress Tuesday, telling members of both the House of Representatives and the Senate the U.S. recession was deeper than the Fed initially estimated.  He also warned the struggling economic recovery was "close to faltering."

Bernanke urged lawmakers to make deep cuts in spending, eventually going beyond the $1.5 trillion in cuts sought by a special Congressional panel.  But he also warned lawmakers must "avoid fiscal actions that could impede" a sluggish economic recovery.

He also predicted "more sluggish job growth" for a country already facing an unemployment rate that has hovered around nine percent for months, with more than 14 million people out of work.

The Fed's latest effort to spark the economy came last month, when it moved to lower borrowing rates for consumers by substituting short-term securities in its $1.7 trillion portfolio for longer-term holdings.  

That maneuver, known as "Operation Twist" has yet to make an impact.  Still, Bernanke said the Fed is prepared to take additional action.  He also repeated during questioning previous assertions that the central bank has more tools to help boost the economy.

The Fed's main tool is the benchmark interest rate which has already been lowered to almost zero.

The U.S. government said last week that the country's sluggish economy grew a bit faster than first estimated in the April-to-June period, but still not fast enough to reduce the country's high unemployment rate.

A report last week on U.S. consumer sentiment showed Americans are also worried about the troubled housing market and falling stock prices.

Some information for this report was provided by AP and Reuters.

You May Like

Video On the Scene: In Gaza, Darkness Brings Dread and Death

Palestinians fear nighttime raids, many feel abandoned by outside world, VOA's Scott Bobb reports More

African Small Farmers Could Be Key to Ending Food Insecurity

Experts say providing access to microloans, crop insurance, better storage facilities, irrigation, road systems and market information could enable greater production More

University of Michigan Wins Solar Car Race

Squad guided its student-designed solar-powered vehicle to fifth consecutive time victory in eight-day bi-annual American Solar Challenge More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid