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GOP Spending Cuts Would Slow Growth: Bernanke

Federal Reserve Chairman Ben Bernanke says a House Republicans plan to cut $61 billion in federal spending this year would reduce economic growth and cause job losses.

Ben Bernanke
Ben Bernanke

Bernanke, speaking to the House Financial Services Committee Wednesday, did not offer a time frame for the economic impact of the cuts, which are in a proposed spending bill to fund the government through the end of September.

But he says they would reduce growth by as much as two-tenths of a percentage point.

Bernanke says: "That would translate into a couple hundred thousand jobs. It is not trivial."

Unemployment is at 9 percent and isn't expected to fall back to more normal levels for four or five years.