News / USA

Yellen Urges Congress to Act on Long-Term Budget Challenges

Federal Reserve Chair Janet Yellen appears before the Senate Budget Committee to examine the nation's economic and fiscal outlook, Capitol Hill in Washington, May 8, 2014.
Federal Reserve Chair Janet Yellen appears before the Senate Budget Committee to examine the nation's economic and fiscal outlook, Capitol Hill in Washington, May 8, 2014.
Reuters
Federal Reserve Chair Janet Yellen, taking a page from her predecessor, urged the U.S. Congress on Thursday to address the nation's long-term budget challenges, warning that the current course was unsustainable.
 
“We can see that going out 20, 30, 50 years without some further shifts in fiscal policy, it's projected that the ratio of debt to GDP will rise to unsustainable levels,” Yellen told the Senate Budget Committee.
 
“I would join my predecessor in saying that I do think it's important that the Congress address that issue,” she said.
 
In a second day of congressional testimony, Yellen said that a recent tightening of fiscal policy had been one of the “headwinds” that had undercut the Fed's efforts to foster a stronger economic recovery.
 
She said that a lessening of the drag from fiscal policy this year was one of the reasons officials at the U.S. central bank were expecting growth to quicken a bit this year.
 
“My predecessor asked, in a sense, that fiscal policy should do no harm,” Yellen said referring to Ben Bernanke, who stepped down as Fed chief at the end of January.
 
“I do want to agree with my predecessor in emphasizing, though, that long-run sustainability of fiscal policy and the debt is something that is very important.”
 
Pressed on whether reforms of so-called entitlement programs would be needed to put the budget on a sustainable patch, or whether tax hikes alone could fix the problem, she declined to answer.
 
“I don't intend to weigh in on particulars,” she said, suggesting that - like Bernanke - she would avoid giving Congress specific advice on fiscal policy.
 
As she had on Wednesday before the Joint Economic Committee, Yellen indicated the Fed was likely to keep benchmark overnight interest rates near zero for some time given the “considerable degree of slack” in the U.S. labor market.
 
She also again cautioned that weakness in the housing sector could undermine her expectation that the economy would grow “somewhat faster” this year than last.
 
“The recovery of the housing sector is very important, to see that ongoing, is important to our recovery and has been a very important factor in the downturn,” Yellen said.
 
She also repeated her warning of the possibility of “adverse developments abroad,” such as heightened geopolitical tensions or an intensification of financial stress in emerging markets, and said that was a risk the U.S. central bank also needed to watch closely.

You May Like

Polls Open in Scotland Independence Vote

As race to persuade undecided voters continues, 'No' voters say they believe life in Scotland will slowly improve, 'Yes' vote not worth the risk More

China-India Border Standoff Continues as Leaders Hold Summit

New Delhi accuses hundreds of Chinese soldiers of illegally entering Indian territory in disputed region of Ladakh More

Ukrainian Activist in Despair About Future of Her Country

IrIna Dovgan, accused of being a spy and tortured by pro-Russian separatists, is appealing to UN Human Rights Council to support her country More

This forum has been closed.
Comment Sorting
Comments
     
by: Mrs. Milkeysnoot from: USA
May 11, 2014 8:35 PM
During this week’s Senate hearings, Janet Yellen was asked by Senator Bernie Sanders if the U.S. was a capitalist democracy or has morphed into an oligarchy. While readers of this site already know the answer to this question, which was recently proved empirically by aPrinceton and Northwestern academic study, it was still stunning to note her unwillingness to answer the question.

I will give her some credit for not flat out lying about it. She inherently understands that the U.S. is a corrupt, shameful oligarchy, but as head of the institution most responsible for this transformation she simply cannot tell the truth. It is incredible that things have fallen so far that a U.S. Senator felt compelled to ask such a question, and even worse that such a powerful official couldn’t vehemently and decisively deny the claim.

Where I take exception with Sanders, is that he appears to live under some strange sort of hypnosis that makes him think only Republican oligarchs are problematic. Of course no sane person should draw any serious distinction between establishment Democrats or Republicans. Furthermore, he also makes the mistake of focusing on the 1%, when the real problem resides in a far smaller 0.01%.

Clearly, Yellen used the Delphi technique to shut Mr. Sanders down. Read yourself about the DELPHI TECHNIQUE!

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
A Dinosaur Fit for Land and Wateri
X
September 17, 2014 8:44 PM
Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid