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Bernanke says U.S. needs to curb record-high budget deficit

2009-06-04 08:49 BJT

Special Report: Global Financial Crisis |

WASHINGTON, June 3 (Xinhua) -- U.S. Federal Reserve Chairman Ben Bernanke said on Wednesday that the United States should begin efforts to curb the record-high U.S. budget deficit.

"Certainly, our economy and financial markets face extraordinary near-term challenges, and strong and timely actions to respond to those challenges are necessary and appropriate," Bernanke said in prepared testimony before the House Budget Committee.

"Nevertheless, even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance," the Federal Reserve chief said.

The Obama administration has forecast that the budget deficit would rise to 1.84 trillion dollars in the current fiscal year, about four times the record set last year.

Bernanke noted that prompt attention to questions of fiscal sustainability is "particularly critical" because of the coming budgetary and economic challenges associated with the retirement of the baby-boom generation and continued increases in medical costs.

"Clearly, the Congress and the administration face formidable near-term challenges that must be addressed. But those near-term challenges must not be allowed to hinder timely consideration of the steps needed to address fiscal imbalances," he said.

"Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth," Bernanke said.

Editor: Xiong Qu | Source: Xinhua