Bernanke: Tax, Regulatory Uncertainty ‘a Negative for Growth’

Comment comes in response to question by Senator Johnson

Washington, D.C. – Senator Ron Johnson (WI) made the following statement today regarding Federal Reserve Chairman Ben Bernanke’s comments on the potential drag on economic growth caused by policy uncertainty. Bernanke’s testimony came at a hearing of the Senate Budget Committee.

Johnson said:

“Just a few days ago, President Obama said that it’s important to have a plan to deliver ‘good jobs and good wages.’ Today Federal Reserve Chairman Bernanke confirmed that tax and regulatory uncertainty is standing in the way.

“I have said many times that I am prepared to work with anyone who is serious about addressing our nation’s challenges. I believe that we need tax and regulatory certainty to help encourage economic growth. Regrettably, the President has refused to work with me – or with the many Members of the House and Senate who agree. I hope that Chairman Bernanke’s testimony causes the President to reconsider his refusal to listen to those on the other side of the aisle.”

Click here to view the exchange between Senator Johnson and Chairman Bernanke.

Transcript of the exchange:

Senator Johnson: “Those tough decisions really do begin with Presidential leadership. I'm new to this town; I've never seen anything really accomplished in Washington without very strong Presidential leadership. And I'm afraid President Obama has just been phoning it in here the last couple years in terms of our debt and deficit issue. One question I would have is - and I probably don't have a whole lot of time for it - can you speak to the lack of an actual plan that makes sense, to business people, to consumers? Can you speak to how harmful that is in terms of economic growth?

Chairman Bernanke: “Well Senator, I'm not going to comment on parliamentary maneuverings, but Senator Wyden made exactly the same question. You know, is uncertainty about the future of the tax code, government programs, and so on a negative for growth? I think it is because firms like to have certainty, like to be able to plan. And again I would take on the same responsibility as a regulator, that we need to make regulations as clear and as effective as possible.”