Bernanke urges balanced approach to deficit cutting

Federal Reserve Chairman Ben Bernanke is urging lawmakers to balance their desire to cut deficits with policies that could help boost the weak economy in the short run. Bernanke tells the House Budget Committee that he recognizes huge budget deficits represent a serious threat to the economy. “Even as fiscal policymakers address the urgent issue of fiscal sustainability, they should take care not to unnecessarily impede the current economic recovery,” Bernanke says. “Fortunately, the two goals … are fully compatible.” The chairman is testifying a week after the Fed signaled that a full recovery could take at least three more years. As a result, the Fed said, it doesn’t plan to raise its benchmark interest rate from a record low before late 2014, at the earliest. Today’s hearing began on a contentious note. Chairman Paul Ryan, a Republican from Wisconsin, said the Fed’s policies were adding to uncertainty and raising risks of higher inflation down the road. The Associated Press has the full story here.