Testifying before the House Budget Committee, Federal Reserve Chairman Ben Bernanke said last week that addressing the “powerful underlying trends” responsible for large projected deficits would bring both short-term and long-term benefits.
He pointed to the plans put forth by the President’s fiscal commission and other groups as a good place to start. Bernanke said tax reform could help foster a more productive economy that would help with deficit reduction, but cautioned that the nation “cannot reasonably expect to grow its way out of our fiscal imbalances.”
In other testimony, Congressional Budget Office Director Douglas Elmendorf told the committee that “a return to sustainable budget conditions will require significant changes in tax and spending policies.”
Office of Management and Budget Director Jacob Lew was scheduled to testify today before both the House and Senate Budget Committees.