Powell urges congressional panel to tackle budget deficits

Christopher Rugaber
Associated Press

Washington – Federal Reserve Chairman Jerome Powell is asking Congress to tackle the growing budget deficit.

Powell’s remarks before the House Budget Committee Thursday came a day after he told Congress’ Joint Economic Committee that the Fed was likely to keep rates unchanged in the coming months, unless there was a “material” shift in the economy’s outlook.

Federal Reserve Board Chair Jerome Powell shake hands with Chairman of the Congress Joint Economic Committee Sen. Mike Lee, R-Utah, during the hearing on the economic outlook, on Capitol Hill in Washington, on Wednesday, Nov. 13, 2019.

Powell is one of the few leading public figures urging Congress to reduce the federal government’s annual deficit, which is nearing $1 trillion.

A large deficit will make it harder for Congress to cut taxes or boost spending when the next recession hits, Powell said. That is a concern because with the Fed’s benchmark interest rate already low, the Fed also has a limited ability to respond to downturns.