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Bernanke Tells Congress It Needs Better Forward Planning

During Federal Reserve Chairman Ben Bernanke testimony today before Congress, Republican Congressman Spencer Bachus and Democrat Congressman Barney Frank engaged in a debate over what would be the best way to solve America's growing deficit problem.

Congressman Bachus said that the most important issue that needed to be addressed was the growing cost of entitlement programs like Social Security and Medicare. Congressman Bachus argued that reigning in the costs of these entitlement programs should be the number one priority if Congress ever wants to balance the budget.

Congressman Barney Frank countered Bachus, saying that the United States needs to cut military spending as a percentage of GDP. Congressman Frank said that the United States needs to stop subsidizing its allies. Frank said that reducing our overseas commitments was the best way to achieve this goal. He said that if America's share of GDP spending devoted to the military was reduced to a level similar to that of our allies, Social Security and Medicare wouldn't be facing such big cuts and Congress would be much closer to balancing the budget.

For his part, Chairman Ben Bernanke skillfully avoided getting drawn into a political debate between the rival parties. Bernanke shifted the focus of his reply to the shortsightedness of Congress when he said that he wished that Congress would look beyond its ten year window when making financial decisions regarding the deficit because it's not until after ten years that the biggest long term effects of their proposed fiscal reforms start to show.

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