Bernanke Says Sequester Would Hit US Recovery

Federal Reserve Chairman Ben Bernanke warned Congress Tuesday that the $85 billion in spending cuts of the March 1 sequester would place a "significant" additional burden on the US economic recovery.

Published

4 months ago

Categories

US, Finance

Topics

US Politics, United States, Economic Policy

People

Ben Bernanke

Places

United States of America, Washington, D.C.

Transcript

SHOTLIST: WASHINGTON, FEBRUARY 26, 2013, SOURCE: POOL **NO RESALE for non-editorial purposes** SOUNDBITE 1 Ben Bernanke (man), Chairman, Federal Reserve (English, 6 sec): "Given the still-moderate underlying pace of economic growth, this additional near-term burden on the recovery is significant." SOUNDBITE 2 Ben Bernanke (man), Chairman, Federal Reserve (English, 16 sec): "To address both the near and longer term issues, the Congress Congress and the administration should consider replacing the sharp, front-loaded spending cuts required by the sequestration with policies that reduce the federal deficit more gradually in the near term, but more substantially in the longer run." - VAR of the Senate Banking Committee hearing -------------------------- AFP TEXT STORY US-economy-bank-growth-politics-budget,lead Bernanke says sequester would hit US recovery WASHINGTON, Feb 26, 2013 (AFP) - Federal Reserve Chairman Ben Bernanke warned Congress Tuesday that the $85 billion in spending cuts of the March 1 sequester would place a "significant" additional burden on the US economic recovery. "The Congress and the administration should consider replacing the sharp, front-loaded spending cuts required by the sequestration with policies that reduce the federal deficit more gradually," he told a Senate hearing. Bernanke cited data from the Congressional Budget Office projecting that the cuts, to be implemented over the next seven months if no moderate substitute program is agreed, would reduce potential economic growth by 0.6 percent. "Given the still-moderate underlying pace of economic growth, this additional near-term burden on the recovery is significant," he said. "Besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short run." Bernanke said US economic growth had rebounded from the fourth quarter, when initial estimates say the economy actually contracted by 0.1 percent. "Available information suggests that economic growth has picked up again this year," he said. The economy continues to grow "at a moderate if somewhat uneven pace." pmh/vs