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Bernanke's diagnosis for ailing economy

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  • Description

    Federal Reserve chairman sends message to lawmakers

  • Duration 2:14
  • Date

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Chairman Bernanke made clear the Fed can only do so much to help the struggling economy but laid out some needed actions congress could today first to promote economic growth and stability the federal budget must be put on -- sustainable long run path he's dead rapidly rising debts are simply unsustainable.

And could provoke a -- with severe consequences for the economy.

-- warned lawmakers that the simultaneous expiration of several large tax cuts and the imposition of spending cuts all scheduled for the end of the year.

Could pose a significant threat to the recovery avoid a situation in which you have.

A massive.

Cut in spending an increasing taxes -- hitting -- one moment the Republican leader in the senate as an answer for that.

The Smart thing to news Smart why it would -- and the uncertainty about the biggest tax increase in history at the end of the year.

They were gonna extend the current tax -- for everyone for one year and during that year.

New comprehensive tax reform for all America.

The president agreed to extend all the -- got back in 2010 to avoid damaging the economy McConnell -- the growth right now is worse than back then.

Bernanke told lawmakers the looming here and mess has created uncertainty that's hurting both hiring and spending.

A Republican congressman put it this way.

The businesses I -- to along main street art hold back aren't holding back on hiring because they're waiting to learn what the government will do for them.

There -- holding back on hiring for fear of what the government will do to them.

Democratic senator Bob Casey offered -- competing view arguing only some of the tax -- should be extended we need to continue to cut spending no doubt about that.

And certainly you cannot reduce the deficit by spending.

Tens of billions of dollars.

On tax cuts for the very wealthiest senator Casey's ought to draw Bernanke into that debate asking him to focus just don't expiring middle income tax cuts.

Bernanke would only look.

At them as a whole and indicated the expiration of all of them would stagger the economy and adverse effect on spending and the growth in the economy.

-- -- would be significant.

Bernanke said the federal soon decide whether it needs to take additional action to boost the economy and if so what.

But he made clear congress has at least is bigger role as the Fed does and faces some critical choices Brett on this with the panel Jim thanks for.

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