Talk of fiscal responsibility returned to Capitol Hill yesterday when Federal Reserve Chairman Ben Bernanke testified at a hearing of the House Budget Committee. Bernanke tried to push Congress and the Obama administration to start planning now to tackle the monumental deficits expected over the next few years. From Bernanke's testimony:

Certainly, our economy and financial markets face extraordinary near-term challenges, and strong and timely actions to respond to those challenges are necessary and appropriate. Nevertheless, even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance...

...Addressing the country’s fiscal problems will require a willingness to make difficult choices. In the end, the fundamental decision that the Congress, the Administration, and the American people must confront is how large a share of the nation’s economic resources to devote to federal government programs, including entitlement programs. Crucially, whatever size of government is chosen, tax rates must ultimately be set at a level sufficient to achieve an appropriate balance of spending and revenues in the long run...

...Clearly, the Congress and the Administration face formidable near-term challenges that must be addressed. But those near-term challenges must not be allowed to hinder timely consideration of the steps needed to address fiscal imbalances. Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth.

The Obama administration has projected a $1.8 trillion deficit for FY 2009. There's certainly a lot of work to do and hard choices to make to bring that number down.

Chairman Spratt's Opening Statement
Ben Bernanke's Testimony (.pdf)
Video Webcast of Hearing (2 hours, 5 minutes, 212 MB)

Image by Flickr user talknewsradio used under a Creative Commons license.