Federal Reserve Chairman Ben Bernanke indicated last week that the frail United States economy will continue to need Federal stimulus spending to fully recover from the 2008 recession.
While testifying before the House Financial Services Committee and the Senate Banking Committee, Bernanke suggested that President Obama and Congress could bolster the weakened economy by extending the tax cuts passed by the previous administration, according to Bloomberg Business Week.
"In the short term I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy," said Bernanke. "There are many ways to do that. This is one way."
However, just a few hours before the Fed chairman made his remarks, U.S. Treasury Secretary Timothy Geithner said that the Obama administration has no plans on extending the tax cuts to families that make more than $250,000 annually, Business Insider reports.
Meanwhile, Bernanke was much less bullish on the economy than he was during his last testimony back in February, noting that it will take "a significant amount of time" to restore the near 10 million jobs lost during the last two years.
"One factor underlying the committee’s somewhat weaker outlook is that financial conditionsthough much improved since the depth of the financial crisishave become less supportive of economic growth in recent months," he said.
Bernanke also defended the financial overhaul bill recently passed by Congress, calling the measure an "important step" toward closing the gaps in Wall Street’s regulatory system.