Associated Press
July 22, 2010

WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke told Congress Thursday that the fragile economy needs government stimulus spending to strengthen the recovery and help reduce unemployment.

Testifying before the House Financial Services Committee, Bernanke urged lawmakers to come up with a credible plan to reduce the government's record-high budget deficits in the long run. But he said they shouldn't move now to slash spending or boost taxes in the near future.

"I believe we should maintain our stimulus in the short term," Bernanke said as he spoke about the economy's challenges for the second straight day on Capitol Hill.

Bernanke again said the Fed is prepared to take new steps to bolster the recovery if needed.

"We are ready, and we will act" if the economy doesn't continue to improve, Bernanke told the House panel.

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