News / USA

Fed Chief Warns of Economic Headwinds From Budget Stalemate

Fed Chief Warns of Economic Headwinds From Budget Stalematei
X
February 26, 2013
Some $85 billion in automatic spending cuts will kick in Friday unless Congress and the Obama administration can agree on an alternate plan to reduce the deficit. "Sequestration," as it's called, was initially agreed upon as a threat to force lawmakers to reach a compromise. But U.S. Federal Reserve Chairman Ben Bernanke warned Tuesday that without a deal soon, the massive spending cuts pose a significant threat to the U.S. recovery. Mil Arcega reports.

Fed Chief Warns of Economic Headwinds From Budget Stalemate

TEXT SIZE - +
Some $85 billion in automatic spending cuts will kick in Friday unless Congress and the Obama administration can agree on an alternate plan to reduce the deficit.  "Sequestration," as it's called, was initially agreed upon as a threat to force lawmakers to reach a compromise.  But U.S. Federal Reserve Chairman Ben Bernanke warned Tuesday that without a deal soon, the massive spending cuts pose a significant threat to the U.S. recovery. 

With no progress in Washington to avoid looming spending cuts, Federal Reserve Chairman Ben Bernanke warned lawmakers that inaction would sharply slow U.S. economic growth.
 
"Moreover, besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short run," said Bernanke.

Despite the high stakes, the action from Washington has been mostly - finger pointing.

Republican House Speaker John Boehner says it's time for the president and the Democratically controlled Senate to take the lead.

"The House has acted twice. We shouldn't have to act a third time before the Senate begins to do their work," said Boehner.

The automatic spending cuts, roughly three percent of the federal budget, would slash defense spending and affect government services from border security to meat inspections.
 
The White House wants a more balanced approach that includes cuts and higher taxes.
 
But as it stands, President Barack Obama calls the sequester arbitrary and irresponsible.

"These cuts do not have to happen," said President Obama. "Congress can turn them off anytime with just a little bit of compromise.'

Republicans say the president is grandstanding.
 
Louisiana Governor Bobby Jindal accused Obama of fear-mongering.

"The president needs to stop trying to scare the American people that, absolutely, you can cut less than three percent without all these awful consequences - without people losing access to critical vaccines, without people, without us jeopardizing food inspections," said Jindal.

But economist William Gale says Republicans' insistence on across the board spending cuts ignores economic reality.

"We should be talking about boosting the economy, boosting spending, not cutting spending right now," said Gale.

Reports suggest Republicans may be willing to modify the sequester to give the administration discretion in deciding which programs to cut. Analysts say such a move would give Republicans political cover but place responsibility for the economic impact squarely on the president.

You May Like

Analysts Warn of Regional Proxy Conflict in Afghanistan

Analysts warn if Kabul’s neighbors do not start to cooperate, competing desires for influence could deteriorate into a bloody proxy war in the country More

Saudi Intelligence Chief Replaced

Bandar bin Sultan came under criticism for supporting al Qaida, prompting King Abdallah to wrest Syria operations away from him in February, handing them to Interior Minister Prince Mohammed bin Nayef More

Poetry Magazine editor Don Share talks what makes a good poem with VOA's David Byrd

What makes a good poem? And is poetry as viable an art form as it once was? To find out, VOA's David Byrd spoke to Don Share, the editor of Poetry Magazine. More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid