WASHINGTON — Before he took charge of the Federal Reserve in 2006, Ben Bernanke vowed to steer clear of political issues. Nowadays he seems to have an opinion on everything.
The latest example came Wednesday, when the Fed chief told Congress that a House Republican plan to cut $61 billion in federal spending this year would cost the economy jobs. Both sides seized on his remarks: Democrats said there was evidence that the cuts would pose a risk to the economic recovery, while Republicans pointed out that Bernanke’s estimate of job losses was much smaller than that of most private economists.
Historically, the Fed has strived to be perceived as politically independent. But with unemployment at 9 percent, Bernanke is finding that image hard to maintain.
Bernanke told the House Financial Services Committee that proposed Republican cuts could cost the economy 0.2 percentage points of growth. “That would translate into a couple hundred thousand jobs. So it’s not trivial,” he said.
Mark Zandi, chief economist at Moody’s Analytics, has estimated the GOP plan would cost the economy 700,000 new jobs by the end of next year. Bernanke says that figure is too high.
