Bernanke Urges Congress To Renew Bush Tax Cuts

Federal Reserve Chairman Ben S. Bernanke dropped a major bombshell on Democrats seeking massive new revenues to narrow the deficit, announcing Thursday that he favors preserving the Bush administration tax cuts in order to help a faltering U.S. economy.

“In the short term I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy,” Bernanke told the House Financial Services Committee. “There are many ways to do that. This is one way.”

Bernanke's statement put him directly at odds with White House officials and House Speaker Nancy Pelosi, who favors raising taxes on wealthy Americans by letting the tax cuts the Bush administration passed in 2001 and 2003 expire.

Bernanke's views also conflict with those of his predecessor, Alan Greenspan, who just last week told Bloomberg TV's Judy Woodruff that lawmakers should allow the Bush tax cuts to expire as scheduled at year's end.

Greenspan conceded however that doing so probably would slow growth.

Bernanke emphasized the importance of giving the economy a boost. But he also told the House that dealing with the deficit, which has ballooned during the Obama administration, remains a major consideration.

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