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News Wrap: Bernanke Says Fed Stimulus Is Critical to Prevent New Recession

October 4, 2011 at 12:00 AM EST
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KWAME HOLMAN: Federal Reserve Chairman Ben Bernanke issued a new warning today about the U.S. economic recovery. Appearing before a congressional committee, he defended the Fed’s latest stimulus efforts. He said they’re critical to prevent a new recession.

BEN BERNANKE, Federal Reserve: It’s particularly important now that the economy is close — the recovery is close to faltering, we need to make sure that the recovery continues and doesn’t drop back, and that unemployment rate continues to fall downward.

KWAME HOLMAN: Bernanke also left open the possibility that the Fed might take additional steps to support the economy. He said nothing is off the table.

Stocks in Europe fell sharply today, driven by a new wave of fear that Greece will default after all. Major indexes in Germany, France and Britain were off 2.5 percent to 3 percent. They sank after Eurozone ministers delayed the next bailout payment to Athens.

But the Greek finance minister insisted his government can stay solvent through mid-November, and expects to receive the bailout funds by then.

EVANGELOS VENIZELOS, finance minister, Greece (through translator): There is no talk of a so-called default. Whoever uses the word “default” in relation to Greece, a Eurozone country, either doesn’t understand the meaning of the word or is playing in the field that has been shaped by the uncontrolled and speculative segments of the international markets.

KWAME HOLMAN: The worries about Greece and the sell-off in Europe sent U.S. stocks reeling, too, at first. But, as the day went on, Wall Street fought its way back.

The Dow Jones industrial average ended with a gain of 153 points, to close at 10,808. The Nasdaq rose nearly 69 points, to close well above 2,404.

Ford Motor Company and the United Auto Workers Union reached a new four-year contract today in Detroit. It does not include annual pay raises, but Ford’s U.S. factory workers will receive a $6,000 signing bonus. The automaker also will add more than 5,700 new jobs, and it’s pledging to invest nearly $5 billion in its American plants.

Ford workers are expected to vote on the new contract next week.

President Obama issued a new challenge to Congress today over his jobs bill. In Mesquite, Texas, he charged again that Republicans, in particular, are blocking action.

On Monday, House Majority Leader Eric Cantor said Republicans can accept parts of the bill, but not the whole package. The president jumped on the statement.

PRESIDENT BARACK OBAMA: I mean, what’s the problem? Do they not have the time? They just had a week off. Is it inconvenient?

I’d like Mr. Cantor to come down here to Dallas and explain what exactly in this jobs bill does he not believe in? What exactly is he opposed to?

KWAME HOLMAN: Republicans answered with a challenge of their own. On the Senate floor, Minority Leader Mitch McConnell called for a vote now, knowing that even some Democrats have problems with the Obama plan.

SEN. MITCH MCCONNELL, (R) minority leader: I don’t think the president is saying here he wants an extensive debate about it. I think he’s saying he wants a vote on it. And I wanted to disabuse him of the notion that somehow we’re unwilling to vote on his proposal. Even though there is bipartisan opposition to the president’s jobs proposal, bipartisan opposition to it, I think he’s entitled to a vote.

KWAME HOLMAN: The Senate’s Democratic Majority Leader, Harry Reid, objected to taking up the jobs bill now. He said there’s other business to deal with first.

Congress has approved another incremental funding measure, this one to keep the government running for the next six weeks. The stopgap continuing resolution passed the House easily today. It expires Nov. 18. The Senate passed it last week.

Lawmakers continue work on a dozen major spending bills for the fiscal year that began Oct. 1.

Air travelers will now have a chance at quicker passage through security at four major U.S. airports. The Transportation Security Administration announced its PreCheck program today.

It’s already being used in Atlanta, as well as Detroit, Miami and Dallas-Fort Worth. Passengers who supply additional personal information may be able to skip taking off their shoes and coats. The program is a response to public complaints over intrusive body scans and pat-downs.

Gunmen in Pakistan struck at Shiites again today. Thirteen were shot to death.

The attackers were suspected of being Sunni militants. Police said they stopped a bus outside Quetta in the southwest. The gunmen separated out ethnic Shiite day laborers and opened fire. Two weeks ago, a similar attack in the same region killed 26 Shiites.

Those are some of the day’s major stories.