Jun 7, 2012 4:46pm
Fed Chairman Ben Bernanke Warns Congress on ‘Taxmaggedon’: ‘If You All Go on Vacation, It’s Still Going to Happen’
The Federal Reserve Board Chairman had a stern warning today for Congress: “Taxmaggedon” is real, it’s coming and only lawmakers can save the nation from falling off this rapidly approaching “fiscal cliff.”
“What is particularly striking here is that this is all pre-programmed,” Fed Chairman Ben Bernanke said. “If you all go on vacation, it’s still going to happen, so it’s important to be thinking about that and working with your colleagues to see how you might address that concern at the appropriate time.”
Bernanke, speaking in front of the Joint Economic Committee, was referring to the year-end intersection of the Bush-era tax cuts expiration, $1.2 trillion in scheduled spending cuts and expiring payroll tax breaks, which, if not addressed could cost American taxpayers with $310 billion in tax increases next year.
The picture the Fed chairman painted today was not pretty.
(Excerpt) Read more at abcnews.go.com …
Fed Chairman Ben Bernanke warns of ‘fiscal cliff’ risks
WASHINGTON — Fears about a looming fiscal crisis at the end of the year are starting to pinch job growth and threatening to undercut the nation’s fragile recovery, a growing number of economists and employers say.
Federal Reserve Chairman Ben S. Bernanke, in testimony Thursday before Congress, repeatedly warned about the so-called fiscal cliff — a reference to the expiration of tax cuts Dec. 31 and the imposition of automatic spending reductions Jan. 1.
By some accounts, the U.S. economy could see an unprecedented fiscal hit of as much as $720 billion if the slated changes take effect.
They would include an end to the temporary tax cuts enacted during the George W. Bush administration and to temporary Obama administration payroll tax reductions. Spending cuts in defense and on federal programs were negotiated as part of last summer’s pact to raise the debt ceiling.
If all the changes take place, the shock will probably cause the economy to contract and possibly lead to a recession, Bernanke said.
So far, however, Bernanke’s concerns about the fiscal cliff have been largely obscured by the more immediate, intensifying financial troubles in Europe and elsewhere.
On Thursday, China cut its interest rates, sparking worries that the sprawling economy might be doing worse than thought. There also is a widespread expectation that Congress will take last-minute action to pull back from the fiscal cliff.
Some analysts are skeptical that lawmakers can come together to avoid … End of excerpt: 300 words from 1,174 word article.
Interesting article continues Fed Chairman Ben Bernanke warns of ‘fiscal cliff’ risks
(Excerpt) Read more at latimes.com …