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Ben Bernanke pushes Congress to avoid fiscal cliff


Federal Reserve Chairman Ben Bernanke on Tuesday implored Congress to act quickly to pull the country back from the “fiscal cliff” set to go into effect at the end of the year, warning that a failure to do so will further dampen the sluggish economic recovery.
“The most effective way that the Congress could help to support the economy right now would be to work to address the nation’s fiscal challenges in a way that takes into account both the need for long-run sustainability and the fragility of the recovery,” Bernanke said at a Senate Banking Committee hearing. “Doing so earlier rather than later would help reduce uncertainty and boost household and business confidence.”

The cliff refers to tax increases and spending cuts that will kick in at the end of year if Congress does not act. Democrats and Republicans have given no indication that they are prepared to strike a compromise and act soon to steer the government clear of the cliff and have instead used the issue as a political battering ram against each other.

Bernanke was careful to stay out of the partisan debate over what specific tax and spending policies Congress should pursue, limiting his advice to telling lawmakers they simply need do something to improve the deficit outlook.

“I’m not in charge here, Congress is,” Bernanke said.

Meanwhile, the central bank chairman did little to tip his hand on what, if any, action the central bank will take to stimulate the economy.

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