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Other News: Fed Chairman Warns of Rising U.S. Deficits

June 3, 2009 at 6:10 PM EST
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JIM LEHRER: In other news today, the chairman of the Federal Reserve warned soaring deficits will endanger the country’s long-term fiscal health. At a Senate hearing, Ben Bernanke urged Congress and the administration to rein in the red ink. The deficit is projected at nearly $2 trillion this fiscal year, four times last year’s record.

BEN BERNANKE, chairman, Federal Reserve: 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.

JIM LEHRER: Bernanke’s concerns about the deficit helped depress stocks after a four-day rally. The Dow Jones industrial average lost 65 points to close at 8,675. The Nasdaq fell more than 10 points to close just below 1,826.

Brazilian military planes and ships found more debris from an Air France jetliner today. The first signs of floating wreckage were spotted yesterday near the flight’s projected path from Rio de Janeiro to Paris.

Initial images from the site showed a 12-mile-long oil slick, but there were still no signs that any of the 228 people on board the plane survived. The French military said the next challenge will be finding the plane’s black box recorders.

COMMANDER CHRISTOPHER PRAZUCK, spokesman, French Military Joint Staff: We have the opportunity to compute, to guess the position of the plane, geographical position of the plane at the instant of the crash. So we will be able to look for the black boxes under the water. This third phase of the operation will start not now, but in a week or so.

JIM LEHRER: There’s still no word on what caused the crash, but a Brazilian newspaper and the Associated Press reported there’s evidence the airliner broke apart in mid-air. They cited a burst of automatic messages that showed cascading system failures.

With President Obama in the Middle East, bombers struck again in Baghdad today. At least seven Iraqis were killed in a blast at a cafe; nearly 30 others were wounded. The pace of bombings has increased in recent weeks as U.S. troops make ready to leave Iraqi cities.

In Afghanistan, the U.S. military has found U.S. air and ground crews failed to follow strict rules in deadly air strikes last month; that finding was widely reported today based on an ongoing investigation. Afghan officials claim 140 civilians died in the bombings of suspected Taliban hideouts in the west. U.S. officials have said most of those killed were Taliban.

Israel has given out differing signals on whether it might attack Iran. The Israeli foreign minister took on the topic as he concluded a three-day visit to Russia. He dismissed any talk Israel might launch a pre-emptive strike on Iran’s nuclear program.

AVIGDOR LIEBERMAN, Israeli foreign minister (through translator): We do not intend to bomb Iran, and nobody will solve their problems with our hands. We don’t need that. Israel is a strong country. We can protect ourselves.

But the world should understand that Iran’s entrance into the nuclear club would prompt a whole arms race, a crazy race of unconventional weaponry across the Mideast that is a threat to the entire world order.

JIM LEHRER: Hours later, that statement was contradicted by Ehud Barak, the Israeli defense minister. He refused to rule out a military strike. Instead, he said, “We are not taking any options off the table.”

Cuba has won back the right to take part in the Organization of American States. The group voted today to revoke its suspension of the communist state, first imposed in 1962. The president of Honduras said it means the Cold War has finally ended. The U.S. urged that any action by the OAS be tied to democratic reforms in Cuba.

The public release of a list of U.S. government and civilian nuclear sites will not harm national security. That word came today from Energy Secretary Chu after the list was accidentally posted on the Internet. Still, Chu called it a matter “of great concern.” The list gave locations of stockpiles of fuel for nuclear weapons, among other things.

New Hampshire is now the latest state to legalize gay marriage. The governor signed a trio of bills today that officially sanction the practice, starting January 1st. The new laws allow churches and religious groups not to take part if it violates their doctrine. New Hampshire now joins five other states where same-sex marriage is already legal.