WASHINGTON, Nov. 20 (Xinhua) -- U.S. Federal Reserve chairman Ben Bernanke Tuesday urged the Congress and Obama administration to strike a deal to avert the looming "fiscal cliff", saying the combination of tax hikes and spending cuts would pose a " substantial threat" to the country's economic recovery.
Despite the "constructive" meeting between Obama and congressional leaders on how to avert the looming "fiscal cliff" on Friday, differences remained in their preferred approaches. Bernanke said the fiscal uncertainty is already weighing down spending decisions of households and businesses.
"Congress and the administration will need to protect the economy from the full brunt of the severe fiscal tightening at the beginning of next year that is built into current law -- the so- called fiscal cliff," the U.S. central bank chief said in a speech in New York.
"The realization of all of the automatic tax increases and spending cuts that make up the fiscal cliff, absent offsetting changes, would pose a substantial threat to the recovery," he said, according to the prepared text.
Bernanke's warning came as the Democrats and Republicans tried to search for common ground in talks to pull back from the cliff and craft a plan to reduce the long term deficit.
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