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

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Video Afghan Economy Sinks As Troops Depart

Afghans are grappling with how exodus will affect country's fragile economy More

Video Scientists Say We Need Softer Robots

Today’s robots are mostly hard, rigid machines, with sharp edges and forceful movements, but researchers at Carnegie Mellon University say they should be softer and therefore safer 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.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs