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Posted at 09:00 AM ET, 03/28/2012

Ben Bernanke: Congress needs ‘political courage’

Federal Reserve Chairman Ben Bernanke expects Congress and the White House to band together by year’s end to bring federal spending back to “a more reasonable position.”

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In a rare public interview Tuesday with ABC “World News” anchor Diane Sawyer, the chairman discussed the nation’s ongoing economic recovery, the housing crisis and his decision to teach a lecture series at George Washington University on the history of the 2008 economic collapse.

Asked by Sawyer about the “toxic paralysis on Capitol Hill,” Bernanke said he anticipated the mood might dissipate by the end of the year.

“At the end of — this year there’s gonna be some big changes in the existing law,” Bernanke said. “The Bush tax cuts will expire, lots of things are gonna happen. And that’ll be a moment where I hope that — Congress and administration will get together and — and make some tough decisions about how to bring our federal budget back to — a more reasonable position.”

A full transcript of the interview may be read here. The exchange specifically about the political mood in Washington is pasted below:

DIANE SAWYER: You’ve also talked about Congress and you had a white paper at one point-- do you feel that what some people have called the toxic paralysis on Capitol Hill is deeply endangering the finances of the country, of the financial stability of the country?

CHAIRMAN BERNANKE: Well, we have expressed-- at the Fed, not just myself and my colleagues have expressed a lot of concern about the long run fiscal sustainability of-- our economy and our federal budget. And that’s something that’s gonna take a lot of political courage and-- creativity and-- and leadership to-- to tackle. And-- so far it hasn’t really happened. But-- you know-- at the end of-- this year there’s gonna be some big changes in the existing law. The Bush tax cuts will expire, lots of things are gonna happen. And that’ll be a moment where I hope that-- Congress and administration will get together and-- and make some tough decisions about how to bring our federal budget back to-- a more reasonable position.

DIANE SAWYER: Do you ever throw up your hands?

CHAIRMAN BERNANKE: Well, politi-- again politics is tough. You know, if-- if you’re a student of history you go back and read things that Alexander Hamilton and Thomas Jefferson were writing about each other and it’s-- pretty amazing. So there’s often a lot of-- a lot of partisanship and a lot of-- of-- rhetoric. Important thing is whether people can get together and do what’s necessary for the country, and we’re urging them to do that.

Here's a quick look at what else is going on today on Capitol Hill:

House could vote this week on budget plan modeled on Simpson-Bowles ideas (by Rosalind S. Helderman in The Washington Post): “Presented as an alternative to a GOP budget blueprint authored by Rep. Paul Ryan (R-Wis.)...it is expected to lose to Ryan’s plan. But any significant support for a proposal calling for $1.2 trillion in new revenues, particularly from tax-increase-adverse Republicans, could signal new hope for efforts in the coming year to get the kind of grand deficit-reduction bargain that eluded Obama and House Speaker John A. Boehner (R-Ohio) in talks over raising the debt ceiling during the summer.”

House Republicans block transportation extension (by Ashley Halsey III in The Washington Post): “Unfortunately, this has turned into a political ‘gotcha’ game,” said House Transportation Chairman John L. Mica (R-Fla.), whose own transportation bill stalled in the face of bipartisan opposition. “I’ve done everything I can to move this forward.”

Ethics Talking Points Take Campaign Stage (by Amanda Becker in Roll Call): For example: The Democratic Congressional Campaign Committee announced Tuesday that it will plaster the Staten Island Ferry “with an advertising campaign that directs commuters to what it is calling a ‘clearinghouse’ of Rep. Michael Grimm’s (R-N.Y.) ‘potentially illegal fundraising’ and ‘questionable business dealings.’”

The Comeback of Campaign Finance (by Eliza Newlin Carney in Roll Call): “A decade after the McCain-Feingold law was signed by the president, the erstwhile allies are delivering a strikingly unified message: The campaign finance rules are in tatters, scandals will follow, and voters will once again demand reform.”

Kinde Durkee likely to plead guilty in $8M embezzlement case (by John Bresnahan and Jonathan Allen in Politico): The California political operative at the heart of the scandal is expected to plead guilty later this week to stealing more than $8 million from her clients, including Sen. Dianne Feinstein and other California Democrats.

Senate candidates queasy on healthcare (by Cameron Joseph and Joseph Lederman in The Hill): “Many Democratic candidates have sought distance from President Obama’s healthcare overhaul and a number of Republicans have dodged taking a stance on Rep. Paul Ryan’s (R-Wis.) proposed Medicare reforms — even after Ryan and House GOP leaders tweaked those reforms to include bipartisan policies suggested by Sen. Ron Wyden (D-Ore.).

What Gender Gap? Washington State Has a History of Women Who Lead (by Isolde Raftery in The New York Times): “Nationwide, women’s groups point out the glaring gender disparity in public life, noting that there are only 6 female governors and 17 female senators. ... But in Washington State, women’s serving in public office has been as consistent as the rain.”

Follow Ed O’Keefe on Twitter: @edatpost

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