video transcript

Federal Reserve Chairman Ben Bernanke talks budget battles, QE3, and Europe in two hours of testimony before U.S. lawmakers. Rough cut. No reporter narration. SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "I'd tell you to try to avoid a situation in which you have a massive cut in spending and increase in taxes all hitting at one moment as opposed to trying to spread them out over time in some way that will give- create less short term drag on the US economy. " SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "The pace of improvement in the US labor market from last summer through say March or say March is actually surprisingly strong given the relatively tepid rate of growth and overall economic activity. And it was a puzzle that we were trying to understand and I gave a speech about this in March and one hypothesis is there was a burst of extra hiring that reflected the reversal of what might have been excessive layoffs in the recession period. " SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "If that is true which we do not know for sure because there were a lot of other things going on but if that is true then the implication is that if growth stays going forward if growth stays near the potential rate of growth say 2 to 2-1/2 percent that the improvement in the employment rate going forward might be quite limited. and so that is again as I said a question that we really have to think about. " SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "It certainly is at a point where its important for European leaders to take additional effective steps to contain the problem. " SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "I recognize that rates are quite low. So that clearly is a consideration. I do think that we do have methods we do have tools that would allow us to get further accommodation in the economy and provide some support. its one thing- its not quite the same thing to say that the problem of the US economy is not lack of financial accommodation, its not the same thing to say that and say you know even if the main problems are coming from elsewhere that the Federal Reserve might provide some support using the tools that it has. But I do want to say and I've said this before that monetary policy is not a panacea. It would be much better to have a broad based policy effort addressing a whole variety of issues. I will leave the details to congress, who has considered many of these issues. So I would be much more comfortable if in fact Congress would take some of this burden from us and address those issues. " SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "The potential expiration of so- called Bush tax cuts- the 2001-2003 tax cuts- is the single biggest item in the fiscal cliff and would have, I think, if everything else held constant would have an adverse effect on spending and growth in the economy that would be significant. "