Bernanke, Congress appeal to one another to fix U.S. economy
(CBS News) NEW YORK - America's top banker painted a bleak picture of the U.S. economy. Federal Reserve Chairman Ben Bernanke warned Congress we could fall back into recession unless agreement is reached on a budget.
He said job growth has slowed -- unemployment has now topped 8 percent for 41 straight months -- and a recession, he said, could cost a lot more jobs.
In Battle Creek, Mich. this week, a now hiring call posted by a new casino brought 1,100 job applicants, all hoping to win one of the 300 new jobs that the gambling center will create. But Fed Chairman Ben Bernanke seems unsure which way to bet on the economy right now.
Bernanke told Congress the financial crisis in Europe is slowing the economy here, saying "the possibility that the situation in Europe will worsen further remains a significant risk to the outlook."
Repeatedly, Bernanke has appealed to Congress for help in giving the economy a shot in the arm. But New York Sen. Chuck Schumer told him point blank today to forget it.
"Given the political realities, Mister Chairman, particularly in this election year, I'm afraid the Fed is the only game in town," Schumer said, "and I would urge you to take whatever actions you think would be most helpful in supporting a stronger economic recovery."
Doubts about the economy's direction are holding employers back, according to Scott Schermerhorn of Granite Investment Advisors.
"There is still lot of uncertainty, whether it is political uncertainty, whether it is regulatory uncertainty," he said. "I would argue there is a lot of uncertainty out there, and I would argue that business CEOs are reluctant to start hiring in a very big way given the uncertainties out there."
That's why Schumer pressed the Fed chairman.
"You certainly agree that unemployment has been too high and is sticky and, despite two false starts, we're having a much rougher time than we ever imagined getting unemployment down," Schumer said.
Bernanke: "Yes, that's true."
"So get to work, Mister Chairman."
But for the moment Bernanke is holding his fire, waiting to see whether the hiring starts to pick up again or whether, in his words, "we are stuck in the mud."
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