Bernanke Says Debt Limit Shouldn’t Be ‘Bargaining Chip’

Federal Reserve Chairman Ben S. Bernanke cautioned lawmakers against using the federal debt limit as a “bargaining chip” during budget talks, saying such moves could provoke market instability and harm the economy.

“I think using the debt limit as a bargaining chip is quite risky,” the Fed chief said today in testimony to the Senate Banking Committee in Washington. Failure to raise the debt limit would “at minimum” lead to “an increase in interest rates, which would actually worsen our deficit and would hurt all borrowers in the economy.”