Bernanke gives update on economy
To view our videos, you need to
install Adobe Flash 9 or above. Install now.
Then come back here and refresh the page.
UNITED STATES -- Federal Reserve Chairman Ben Bernanke does the math for lawmakers, appearing before the U.S. House for the first time since Republicans took control of it.
Bernanke said the fed's policy known as QE2 is working to improve the job situation. That's the central bank's second phase of injecting money into the economy, started in November.
In January, the unemployment rate was nine percent after the fastest two month decline in 53 years. Bernanke warned lawmakers to view this data with caution.
"With output growth likely to be moderate for a while and with employers reportedly still reluctant to add to their payrolls, it will be several years before the unemployment rate has returned to a more normal level," Bernanke said.
Bernanke also warned Congress not to play politics with the debt ceiling, which America is encroaching on at its $14 trillion mark.
Capital Region Congressman Paul Tonko told Bernanke his constituents in New York are "dismayed" about a new tax okayed by Congress at the end of 2010.
Tonko says Congress raised taxes for individuals making under $20,000 a year, while giving tax relief to the wealthiest families. He asked what impact this type of policy would have on consumer spending going forward.
"The distributional aspects of taxes are very contentious. I'm sorry, I won't be able to give you the answer you want. Because I think, ultimately, I think the decisions about equity and efficiency go into the tax code. I'm going to leave that particular decision to the Congress," Tonko said.
Bernanke's only other advice to Congress on that matter is to pay attention to the overall revenue collection to achieve budget balance over time.