BIDEN - Transition: Economic Team

"What Biden’s choices for his economic team say about his priorities" PBS NewsHour 11/30/2020

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SUMMARY:  President-elect Joe Biden on Monday named a diverse group to lead his economic team, including Janet Yellen, the former head of the Federal Reserve, as his choice for Treasury Secretary.  Jim Tankersley, who covers economics for The New York Times and is author of the recent book, "The Riches of This Land," joins Judy Woodruff to discuss.

 

 

"Biden’s economic team faces unprecedented crises in shift from Trump" PBS NewsHour 12/01/2020

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SUMMARY:  President-elect Joe Biden on Tuesday introduced his economic team, which is planning on making a sharp shift from the Trump years and his economic policies.  Lisa Desjardins and Yamiche Alcindor join Judy Woodruff to discuss.

 

 

"Biden’s transition pushes ahead amid grim economic outlook" PBS NewsHour 12/04/2020

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SUMMARY:  The Biden White House transition continues though the president-elect is already facing what may be his greatest challenges, as the pandemic fills hospitals and jars the economy again.  Meanwhile, the Trump campaign continues to lose its legal challenges in moving to dispute the election result.  Judy Woodruff has the story.

BEATING THE ODDS - Mary Daly

"Can a high school dropout turned top economist give a new perspective to the Fed?" PBS NewsHour 12/13/2018

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SUMMARY:  Mary Daly dropped out of high school and ended up as president of the Federal Reserve Bank of San Francisco.  As a part of our weekly series Making Sen$e, Paul Solman travels with Daly to Boise, Idaho, where through a unique lens of economic policy, she tries to help others find the same success in the workforce as she did.

FED CHAIR - Different Era For Workers' Wages

HINT:  Trickle-Down economics is a Republican myth.

"Fed Chair Jay Powell: U.S. may be in a different era for workers’ wages despite economic gains" PBS NewsHour 10/3/2018

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SUMMARY:  Federal Reserve Chairman Jay Powell discusses the state of the economy, bigger changes in the job market and why wages haven’t caught up with other economic trends in a conversation with Judy Woodruff.  At the Atlantic Ideas Festival, Powell also explained why he supports “gradually” increasing interest rates and how the strong economy hasn’t reached every American.

WALL STREET - Beware ‘Faux Experts’

"Why our financial decision-makers need ‘skin in the game’" PBS NewsHour 5/24/2018

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SUMMARY:  Economic contrarian Nassim Taleb warned of a coming financial crisis more than a decade ago.  Now he believes there’s a big con going on, and that the Federal Reserve's response to the 2008 crash is part of it.  Economics correspondent Paul Solman catches up with Taleb to discuss his new book, “Skin in the Game” and hear his latest concerns.

WALL STREET - Oil Jitters, 'The Plunge'

WAAAA... I'm only going to make a million this month instead of the billion I expected....

"What plummeting oil prices mean for the U.S. stock market" PBS NewsHour 1/15/2016

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SUMMARY:  Another market plunge in China and plummeting oil prices -- which dropped to a staggering $30 a barrel -- fueled a tough week on Wall Street.  Judy Woodruff talks to Bradley Olson of The Wall Street Journal and Liz Ann Sonders of Charles Schwab.

JOSH EARNEST, White House Press Secretary:  There’s no denying that weakness in other markets with whom we do extensive business is going to be a headwind for the U.S. economy.  We’re mindful of that, particularly as the international economy becomes more integrated, and we have to be sensitive to movements that we see in the economies of other countries.

JUDY WOODRUFF (NewsHour):  The U.S. market was also hurt by disappointing reports on several major economic indicators. Industrial production fell for a third straight month in December.  And retail sales unexpectedly dropped a 10th of a percent last month, partly because warmer weather hurt winter clothing sales.

For a closer look at the dramatic drops in both the stock market and world oil prices, we turn to Liz Ann Sonders.  She’s chief investment strategist at Charles Schwab.  And Bradley Olson, he’s national energy reporter for The Wall Street Journal.

And we welcome both of you to the program.

Liz Ann Sonders, what is behind this volatility today in the market?

LIZ ANN SONDERS, Charles Schwab:  Many of the same things, actually, that contributed to the volatility that we saw last year.

You have touched on certainly oil, but it’s more broadly what’s happening in the commodity complex, and not just the huge plunge, in and of itself, but what that says about global growth.  Of course, related to that is China, the weakness there, not only in its equity market, but its economy, its currency.  That is tied into commodity prices.

And then even more importantly was the uncertainty regarding the Fed.  We got past the uncertainty the defined 2015 in terms of will they, won’t they, and if they will, when?  They got the first rate hike.  Now it’s what are they going to do from here?  Are they going to continue to raise interest rates?  What will be the justification?

So, a lot of it really is unfinished business from 2015. It’s just conspired to occur in a condensed period of time, unfortunately, right at the beginning of the year, which I think adds to the angst for investors.

IN YOUR WALLET - The FED Interest Hike

"What the Fed’s interest rate hike means for your wallet" PBS NewsHour 12/15/2015

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SUMMARY:  The Federal Reserve is doing something it hasn't done since 2006, raising interest rates.  The long-awaited announcement by Fed chair Janet Yellen hikes a key short-term rate from near zero.  For a closer look at how the Fed made its decision, Gwen Ifill talks with David Wessel of the Brookings Institution and Tara Siegel Bernard of The New York Times.

GWEN IFILL (NewsHour):  Now, up it finally went.  The long-awaited and long-predicted interest rate hike was announced today by the Federal Reserve.

This afternoon in Washington, Fed Chair Janet Yellen explained economic conditions were ripe for the increase.

JANET YELLEN, Chair, Federal Reserve Chair:  The underlying health of the U.S. economy, I consider to be quite sound.  I think it’s a myth that expansions die of old age.  I do not think that they die of old age.  So, the fact that this has been quite a long expansion doesn’t lead me to believe that its one that has — its days are numbered.

GWEN IFILL:  For a closer look at today’s rate hike, both in terms of how the Fed makes its decisions and what this move might mean for your average household budget, we turn to David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at The Brookings Institution, a nonpartisan research center, and contributing correspondent to The Wall Street Journal; and Tara Siegel Bernard, personal finance reporter at The New York Times.

David, welcome.

So, tell me.  We have been talking about this for a long time.  And as you just heard her talk about the long expansion, what took so long for them to finally make such an incremental move?

DAVID WESSEL, Brookkings Institution:  You sound impatient, Gwen.

(LAUGHTER)

GWEN IFILL:  Well, I think that the Fed has figured that interest rates needed to be low for a very long time because the economy was very slow to recover from a devastating recession, and because part of their strategy is to get inflation to a 2 percent target.  And they’re still not there.

So there was no reason to rush.  And now they have decided the economy is healthy enough for them to just to begin to lift their foot gradually off the accelerator.

NEWSHOUR BOOKSHELF - "The Courage to Act"

"What it was like to head the Fed during the 2008 meltdown" PBS NewsHour 10/8/2015

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SUMMARY:  "In “The Courage to Act,” former Federal Reserve chairman Ben Bernanke writes that the global economic collapse of 2008 could have resulted in a crisis akin to 1929 had he, his colleagues and policymakers around the world acted differently.  He joins Judy Woodruff to discuss his memoir of that turbulent time and its aftermath.

JUDY WOODRUFF (NewsHour):  He took on perhaps the most important job in the financial world a year before a global economic collapse.

Former Federal Reserve Chairman Ben Bernanke reflects on that turbulent time in a new book, “The Courage to Act: A Memoir of a Crisis and Its Aftermath.”

Ben Bernanke, welcome to the program.

BEN BERNANKE, Former Chairman, Federal Reserve:  Thank you for inviting me.

JUDY WOODRUFF:  So, you write in this remarkable book that takes us inside not only your life, inside the Fed, a place we don’t hear about very often, that if you and your colleagues had not acted as you did in 2008, that we could have seen something like 1929 again.

Do you really believe that might have happened?

BEN BERNANKE:  Well, nobody can know for sure, but, as an academic, I studied the Great Depression.  I studied how financial panics affect the economy.  And I was very concerned about that, you know, even before Lehman Brothers, even before the financial panic hit its peak.

But after Lehman Brothers, and when the financial panic accelerated, we saw just a tremendous drop-off in the economy, as sharp as the beginning of the Great Depression.  So, I really do believe that it would have been a very, very serious and protracted downturn if the financial crisis had not been arrested.

JUDY WOODRUFF:  So, the title — in the title is “The Courage to Act.”

But I guess one question is, did you and your colleagues really have a choice?  If things were about to fall apart, what else could you have done?

BEN BERNANKE:  Well, the title refers to policy-makers around the world.

It was a very chaotic situation, a very scary situation, big, high-stakes decisions and in a very uncertain and politically difficult environment.  And people — policy-makers could have been passive.  That was what some commentators were urging, for example, that we should just step back and let the market take care of it.

So it was very difficult to do that.  And I’m glad to have been part of a Fed and Treasury team that took the action that was needed.

BANKING ON IT - Big-Banks and the New York FED

"Cozy relationship between Fed and big banks draws scrutiny" PBS NewsHour 12/2/2014

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GWEN IFILL (NewsHour):  .....new questions about how the Federal Reserve supervises big banks.

ProPublica and public radio’s “This American Life” have produced reports focusing on the role of a former supervisor from the New York Fed, Carmen Segarra, who was monitoring Goldman Sachs.  Segarra was placed inside the bank, as required by law, but she also made secret audio recordings that seemed to show other Fed officials were going too soft on Goldman, including over a deal one regulator called legal, but shady.

Segarra was fired a few months later.  The Fed has denied any connection, but said it will conduct its own review.

Those issues were the subject of a recent Senate hearing with New York Fed President William Dudley.

Jake Bernstein helped break the initial story for ProPublica.

Judy spoke with him recently.

JUDY WOODRUFF (NewsHour):  Jake Bernstein, welcome.

So, tell us more about what has sparked interest in the Fed all over again and how it does its job.

JAKE BERNSTEIN, ProPublica:  Sure.

The genesis of this is really a bank examiner who was at the Fed in 2011 and 2012.  She was fired after about seven months on the job.  But before she was fired, she secretly recorded hours, approximately 46 hours, of meetings of her on the job with her colleagues and at the bank that she was supervising, which happened to be Goldman Sachs.

We got access to those recordings and have written some stories based on them.

JUDY WOODRUFF:  And how does the Fed explain it?  As we mentioned before, they seemed to suggest the Fed going soft on Goldman Sachs.  How — is that a fair interpretation?  And how does the Fed explain it?

JAKE BERNSTEIN:  Well, what is interesting is that that is not our interpretation, or simply our interpretation, because, in 2009, the Fed brought in an outside consultant to do a top-to-bottom review of their supervisory practices involving big banks.

And this outside consultant found that the New York Fed was too deferential to the banks it was supervising and that there was a climate of fear.  I mean, he basically said that the culture of the New York Fed was the biggest obstacle to completing its mission.

And so we sort of used that as a baseline to then look at what these recordings showed.  And what they seemed to demonstrate was that not a lot had changed since that consultant’s report in 2009.

ECONOMY - The FED Ends Financial Stimulus Programs

"Why the Fed frets about both jobs and inflation" PBS NewsHour 10/29/2014

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GWEN IFILL (NewsHour):  The mission of the Federal Reserve has long been the subject of debate, especially since the 2008 financial crisis.  Six years later, the economy is recovering, but the Fed’s role is still being questioned.

Paul Solman has the story, part of his ongoing reporting Making Sense of financial news.

PAUL SOLMAN (NewsHour):  For the Federal Reserve, today marks an historic moment, the end of six years of unremitting financial stimulus, the money creation programs known as quantitative easing.

This is actually the third easing the Fed has done since the crash.  We met Brian Sack on the floor of New York Fed back in 2009, when it all began.

BRIAN SACK, Former Markets Group Chief, Federal Reserve Bank of New York:  The way we create money is by buying securities.

PAUL SOLMAN:  Securities like U.S. Treasury bonds and mortgage-backed bonds from banks and other financial institutions.

BRIAN SACK:  So when the Federal Reserve buys a Treasury security, it’s putting funds into the financial sector.

PAUL SOLMAN:  Now, since the crash of ’08, the Fed has created $3.5 trillion.  Why?  To lower interest rates and thus spur consumer and business spending, creating new jobs.  But, of course, creating too much money risks serious inflation.  So the Fed frets about both, jobs and sound money, a reason it decided today to stop injecting cash into the economy.

BANKING - Tougher Regulations on Limiting Risks

Gee... what a 'unique' idea.  Banks taking less risk with OUR money.  Lets not forget where banks get their money.

"Banks Ordered to Add Capital to Limit Risks" by PETER EAVIS, New York Times 4/8/2014

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Federal regulators on Tuesday approved a simple rule that could do more to rein in Wall Street than most other parts of a sweeping overhaul that has descended on the biggest banks since the financial crisis.

The rule increases to 5 percent, from roughly 3 percent, a threshold called the leverage ratio, which measures the amount of capital that a bank holds against its assets.  The requirement — more stringent than that for Wall Street’s rivals in Europe and Asia — could force the eight biggest banks in the United States to find as much as an additional $68 billion to put their operations on firmer financial footing, according to regulators’ estimates.

Faced with that potentially onerous bill, Wall Street titans are expected to pare back some of their riskiest activities, including trading in credit-default swaps, the financial instruments that destabilized the system during the financial crisis.

In that respect, some regulators and advocates for tougher financial regulation said, the new rule is a more straightforward tool that will be harder to evade and easier to enforce than many of the new regulations covering the sprawling, complex businesses of banking.  Capital is important to banks because it acts as a buffer for potential losses that might otherwise sink an institution.

“It’s real, it’s tangible, it makes a difference, and improves the banks’ loss absorbing capacity,” said Sheila C. Bair of the Pew Charitable Trusts and a former chairwoman of the Federal Deposit Insurance Corporation, a bank regulator.  “Many of the other rules are about controlling behavior, but there is only so much behavior you can control.”

The banks and the shareholders have had time to brace for the rule, which was originally proposed in July.  It is also scheduled to take effect at the start of 2018, giving the banks considerable time to adapt and raise capital.

The F.D.I.C., the Office of the Comptroller of the Currency and the Federal Reserve wrote the rule.  But tensions among the agencies increased when William C. Dudley, the president of the Federal Reserve Bank of New York, raised the concern that the new rule could complicate the Fed’s efforts to conduct monetary policy.  In the final rule, however, regulators said that they expected the impact on monetary policy to be limited.

“Banks with stronger capital positions are in a better position to lend, to compete favorably in any market and to achieve satisfactory results for investors,” Thomas M. Hoenig, vice chairman of the F.D.I.C., and a firm proponent of the rule, said in a statement.  “Without sufficient capital, the opposite is true.”

As regulators approved the rule, they also proposed a crucial adjustment that would most likely make the rule tougher for firms with large Wall Street businesses.  The regulators said that they expected that adjustment to be part of the rule by 2018, but banks are certain to lobby against it, as they did with the main rule.  The financial industry contended that it was blunt and, in many ways, unnecessary.

ECONOMY - The FED Scales Back Buying Treasury Bonds

"Federal Reserve announces pull back on stimulus as Bernanke nears end of tenure" PBS Newshour 12/18/2013

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JUDY WOODRUFF (Newshour):  The Federal Reserve has been warning for months that it would shift and reduce the size of its role in spurring the economy.  But right up to this afternoon's announcement, many were still wondering when the Fed would dial back and how it would do so.

Ben Bernanke came to his last scheduled news conference as Fed chairman as the Central Bank announced it will start scaling back its long-running stimulus program.

BEN BERNANKE, Federal Reserve Chairman:  Today's policy action reflects the committee's assessment that the economy continues to make progress, but that it also has much farther to travel until conditions can be judged normal.

JUDY WOODRUFF:  The Fed has been buying $85 billion in Treasury bonds every month to hold down interest rates and boost economic growth.  Starting next month, that amount will be reduced by $10 billion a month.

At the same time, a benchmark short-term interest rate will stay near zero.  The Fed says that policy will hold well past the point when the unemployment rate falls below 6.5 percent.  It's now at 7 percent.

BEN BERNANKE:  The job market has continued to improve, with the unemployment rate having declined further.  At the same time, the recovery clearly rings far from complete, with unemployment still elevated and with both underemployment and long-term unemployment still major concerns.

JUDY WOODRUFF:  For Bernanke, the announcement is a climax to an eight-year tenure that's been marked by big moments in U.S. financial history.

ECONOMY - To Taper FED's Stimulus Efforts?

"To taper stimulus efforts? Examining the Fed's role in the economic recovery" PBS Newshour 12/16/2013

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PAUL SOLMAN (Newshour):  A candle, also known as a taper, a candle shrinking, also known as tapering, and thus we introduce the decision once again facing the Federal Reserve and its much-anticipated Open Market Committee meeting this week.

To taper or not to taper, that is the burning question for bond investors, for stock investors, for the economy as a whole.  Since the crash of '08, the Fed has created several trillion dollars of new money to buy Treasury and mortgage-backed bonds.  Will that buying finally taper off?

We spoke with former Fed economist Catherine Mann.

CATHERINE MANN, Brandeis University International Business School:  Taper means reduce the amount, the pace, so going from $45 billion to, say, $35 billion a month.

PAUL SOLMAN:  Billions of dollars that, ever since the crash, the Fed's trading desk in New York has periodically injected into the economy by a process known as quantitative easing, creating great quantities of money to buy bonds, thus easing interest rates to boost the economy.

So what does Professor Mann think the Fed will do this week?

WALL STREET - Regulators Adopt 'Volcker Rule' For Risky Trades

"Will the Volcker Rule change the culture of Wall Street?" PBS Newshour 12/10/2013

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JUDY WOODRUFF (Newshour):  Five years after the financial crisis crippled the American economy, the behavior of Wall Street and other financial firms has been the subject of intense debate, lobbying and legislation.

At the center of financial reform, one rule has attracted more scrutiny than almost any other, the Volcker rule, named after former Federal Reserve Chairman Paul Volcker.

Today, federal regulators spelled out how it's supposed to work.  And now the question is, what kind of impact will it have on reducing risk?

Jeffrey Brown has the story.

JEFFREY BROWN (Newshour):  The Dodd-Frank Act, signed into law by President Obama in 2010, contained hundreds of provisions designed to avoid future meltdowns, among the most controversial, the Volcker rule, named for the former Fed chairman.

MAN:  All in favor, please say aye.

MAN:  Aye.

MAN:  Aye.

JEFFREY BROWN:  Its final approval today by five regulatory agencies signals a major shift in practices banks can undertake and their oversight.

FEDERAL RESERVE - Nominee Yellen Before U.S. Senate

"Fed nominee Yellen defends stimulus efforts before Senate committee" PBS Newshour 11/14/2013

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SUMMARY:  Federal Reserve nominee Janet Yellen, the woman poised to become the most powerful banker in the world, faced scrutiny from the Senate Banking Committee.  Yellen discussed the Fed's move to continue stimulus efforts and pledged to keep up outgoing chairman Ben Bernanke's push for greater transparency.  Kwame Holman reports.

GWEN IFILL (Newshour):  As Washington debated health care fixes and the world coped with the Philippine disaster, the woman who would become -- who could become the most powerful banker in the world appeared on Capitol Hill today.

Janet Yellen, who would succeed Ben Bernanke as chairman of the Federal Reserve, appeared to move one step closer to confirmation, but not without scrutiny.

NewsHour congressional correspondent Kwame Holman reports.

FEDERAL RESERVE - First Female Tapped to Chair FED

"Janet Yellen nominated to succeed Bernanke as Federal Reserve chair" PBS Newshour 10/9/2013

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SUMMARY:  Following a politically charged search, President Obama named Janet Yellen as his nominee to be the next -- and first female -- chair of the Federal Reserve.  Judy Woodruff gets reactions from Christina Romer of the University of California, Berkeley, and former Congressional Budget Office director Douglas Holtz-Eakin.

OPINION - Brooks and Dionne 9/20/2013

"Brooks and Dionne Discuss Conflict in the GOP, Confronting Gun Violence" PBS Newshour 9/20/2013

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SUMMARY:  New York Times columnist David Brooks and Washington Post columnist E.J. Dionne join Judy Woodruff to discuss the week's top political news, including prospects of a government shutdown, conflict and leadership within the Republican party, the politics of choosing a new Federal Reserve chairman and the shooting at the Navy Yard.

ECONOMY - Keeping Up the Stimulus

"What's Behind the Federal Reserve's Surprising Decision to Keep Up Stimulus?" PBS Newshour 9/18/2013

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SUMMARY:  Chairman Ben Bernanke announced that the Federal Reserve would continue its stimulus effort of pouring money into the bond market because the economy still needs help.  Gwen Ifill talks to Neil Irwin of The Washington Post for a deeper look into the thinking at the Fed.

BEN BERNANKE, Federal Reserve Chairman:  We try our best to communicate to markets.  We'll continue to do that. But we can't let market expectations dictate our policy actions.

Our policy expectations have to be determined by our best assessment of what's needed for the economy.  What we will be looking at is the overall labor market situation, including the unemployment rate, but including other factors as well.  But, in particular, there is not any magic number that we are shooting for.  We're looking for overall improvement in the labor market.

GWEN IFILL (Newshour):  Today's moves comes amid a very public and highly- anticipated decision from the president about who will succeed Bernanke next year.

We look deeper into the Fed's thinking with Neil Irwin, who covers the financial world for The Washington Post.  He's also the author of "The Alchemists:  Three Central Bankers and a World on Fire."

ECONOMY - Easing Concerns Caused by FED Chairman's Statement

Typical knee-jerk reaction by the worshipers-of-greed on Wall Street.

"Fed Officials Try to Ease Concern of Stimulus End" by BINYAMIN APPELBAUM, New York Times 6/27/2013

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The economy is the victim of a little misunderstanding, Federal Reserve officials said on Thursday, telling investors who have sent borrowing costs soaring that they are misguided in believing the Fed’s stimulus campaign is about to wane.

The message, delivered in three separate but similar speeches, reflects the Fed’s frustration with a broad rise in interest rates that began in May and accelerated after remarks last week by the Fed’s chairman, Ben S. Bernanke.

“I don’t want to be too cute about a serious matter,” Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta, said in Marietta, Ga., “but to make an analogy, it seems to me the chairman said we’ll use the patch — and use it flexibly — and some in the markets reacted as if he said ‘cold turkey.’ ”

The speeches, including one by William C. Dudley, president of the Federal Reserve Bank of New York and one of Mr. Bernanke’s closest allies, appeared to make an impression, helped along by upbeat domestic economic data and an easing of concerns about Chinese financial conditions.  Stocks rose modestly, ending up for the third day in a row, while interest rates ticked downward, inverting the recent pattern.

On Wall Street, the broad Standard & Poor’s 500-stock index had risen for most of the first five months of the year, bringing it to a high of 1,669.16 on May 21.  But the next day, after Mr. Bernanke first hinted at an impending change in Fed policy, stock prices began falling, and the S.& P. 500 eventually dropped 5.7 percent to a low on June 24, a few days after the most recent Fed policy statement.  Since then, as Fed officials have sought to clarify their goals, the index has risen 2.5 percent, including Thursday’s 0.6 percent increase.

On Thursday, the three officials emphasized that the Fed was increasingly optimistic about the durability of economic growth.  And they reiterated that they expected to reduce the volume of the Fed’s monthly bond purchases later this year.  But the Fed’s overall effort to reduce borrowing costs will continue as long as necessary, most likely for years to come.

Investors, they said, need to gently place interest rates back down on the floor.

“Market adjustments since May have been larger than would be justified by any reasonable reassessment of the path of policy,” said the Fed governor Jerome H. Powell.

Mr. Dudley, who is also the vice chairman of the Fed’s policy-making committee, was even more emphatic.  Investors expecting an early exit are “quite out of sync” with the Fed, he said.  “A rise in short-term rates is very likely to be a long way off.”

WALL STREET - Uncertainty and the Effect of China

"Wall Street Feels Pain of China's Credit Crunch, Federal Reserve Uncertainty" PBS Newshour 6/20/2013

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SUMMARY:  It was a bad day for global markets, whose stocks fell over worries about a credit crunch in China and comments by Federal Reserve Chairman Ben Bernanke that the fed may begin paring back stimulus efforts.  Jeffrey Brown gets reactions from The Wall Street Journal's David Wessel and James Paulsen of Wells Capital Management.

POLITICS - Sequestration, a 'Dr. Strangelove' Idea

Reminder, the FED is independent from the Administration and Congress.

"Fed Chair Bernanke Warns Lawmakers Sequester Could Slow Economic Recovery" PBS Newshour 2/26/2013

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GWEN IFILL (Newshour):  The federal government moved another day closer today to $85 billion in automatic spending cuts. And as political charges and countercharges flew, Federal Reserve chief Ben Bernanke raised new fears about the potential economic fallout.

The Fed chairman told a Senate committee that forcing across-the-board spending cuts could slice half-a-percentage point off economic growth.

BEN BERNANKE, Federal Reserve Chairman:  I think an appropriate balance would be to introduce these cuts more gradually and to compensate with larger and more sustained cuts in the longer run to address our long-run fiscal issues.

GWEN IFILL:  Bernanke said the sequester was supposed to be a doomsday weapon designed to spur compromise.

BEN BERNANKE:   It was done to be sort of like "Dr. Strangelove," you know, the bomb that goes off.  So, obviously, if you can find a way to, you know -- in a bipartisan way to make it more effective and better prioritized, that would be a good thing.

Significant excerpt

REP. JOHN BOEHNER, R-Ohio, Speaker of the House:  Now, the American people know the president gets more money, they're just going to spend it.  And the fact is, is that he's gotten his tax hikes. It's time to focus on the real problem here in Washington, and that is spending.

NO KIDDING!  That is what government (local, state, federal) is mandated to do with tax income, which is government's paycheck.  That is what I do with my paycheck, spend it.