Washington- Federal Reserve Chairman Ben Bernanke, today at a Senate Banking Committee hearing, agreed with Neb. Sen. Mike Johanns on the need for Congress to avert the so-called "fiscal cliff" with bold, decisive leadership to curb our nation's debt.
The term fiscal cliff is often used to describe the mix of automatic tax increases and spending cuts expected at the end of this year.
Economists have warned that without action, this cliff could force the U.S. economy back into recession.
In response to Johanns' questioning on the need for immediate Congressional action on a long-term debt solution, Bernanke said, "It would be very positive. It would reduce a lot of the uncertainty that we see … And it would show the ability of our political system to deliver important results."
"You may recall that when the United States government was downgraded last summer the putative reason was the concern about the ability of Congress to come to a solution … I think that would go a long way to reducing uncertainty, in increasing confidence, and addressing one of our biggest longer-term problems," said the Chairman.
Johanns has long called for Congress to act on comprehensive deficit reduction and has worked across party lines to find a solution to our nation's dire fiscal situation.
"Recent reports have found without Congressional action the so-called fiscal cliff will result in more than two million lost jobs and a further slowing of our already sluggish economy. With consequences like this, its clear Congress cannot afford to wait until after the election to act," Johanns said following the hearing.
"Americans and our markets need to know Washington is still capable of solving national problems," said Johanns. "We must all redouble our efforts to get serious about reducing our debt, reining in spending and reforming the tax code to support America's job creators."