Sept. 14 (Bloomberg) -- Ben S. Bernanke, the chairman of the Federal Reserve, will meet with the Senate Finance Committee privately on Sept. 19 to discuss the economy and the so-called fiscal cliff set for the end of the year, the panel said.
If Congress doesn’t act, more than $600 billion in automatic tax increases and spending cuts will take effect starting in January. That is one of the “main sources of risk” facing the U.S. economy, Bernanke has said.
Finance Committee Chairman Max Baucus described the meeting as an extension of discussions he has been holding with lawmakers and people in the private sector about the fiscal cliff.
“This is a continuation of those conversations and my efforts to bring Republicans and Democrats together,” said Baucus, a Montana Democrat, in a statement today. “We’ll need good ideas from everyone to overcome the many fiscal challenges we face. We need to work together to ensure the economic future of our nation.”
Lawmakers are deadlocked over how to avert the fiscal cliff, particularly on tax policy. Democrats propose letting tax cuts expire for top earners while Republicans want to extend expiring tax reductions for all income levels.
The Finance Committee has jurisdiction over taxes and entitlement programs, meaning that it will have a central role in the discussions about the fiscal cliff that will occur after the Nov. 6 election.
Bernanke and the Federal Open Market Committee yesterday announced they would begin an open-ended program to buy $40 billion a month of mortgage debt in a bid to support the housing market and improve the pace of job growth.
“This is a Main Street policy, because what we’re about here is trying to get jobs going,” Bernanke said at a news conference yesterday. “We’re trying to create more employment. We’re trying to meet our maximum employment mandate, so that’s the objective,” he said, referring to the Fed’s mandate from Congress for full employment and stable prices.
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