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News Wrap: Fed Warns Congress to Rein in National Debt

In other news Wednesday, Federal Reserve Chairman Ben Bernanke told Congress and the President to begin reining in the deficit and a series of powerful earthquakes killed at least 400 people in western China.

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    The chairman of the Federal Reserve warned Congress and the president today to start reining in the national debt. Ben Bernanke testified at a Senate hearing. He said a credible plan to bring down record deficits could lower long-term interest rates and raise consumer confidence.

  • BEN BERNANKE, Federal Reserve Chairman:

    Addressing the country's fiscal problems will require difficult choices, but postponing them will only make them more difficult. Although sizable deficits are unavoidable in the near term, maintaining the confidence of the public and financial markets requires that policy-makers move decisively to set the federal budget on a trajectory toward sustainable fiscal balance.


    Bernanke also indicated he has new hope for the staying power of the fledgling economic recovery. But he said high unemployment won't come down any time soon.

    The latest economic numbers showed spending on retail goods rose more than expected last month, thanks to milder weather and auto incentives. But consumer prices went up only slightly, showing inflation remains in check.

    The latest economic data, plus upbeat profit reports, sent Wall Street higher. The Dow Jones industrial average gained more than 103 points to close at 11123. The Nasdaq rose almost 39 points to close near 2505. And the Standard & Poor's 500 finished above 1200 for the first time in a year-and-a- half.

    Strong earthquakes rocked an area of Western China today, killing nearly 600 people. More than 10,000 others were injured. The quakes centered around a remote mountainous region near Tibet. The initial tremor registered a magnitude of 6.9.

    We have a report narrated by Lindsey Hilsum of Independent Television News.


    Driving into the earthquake zone, the survivors, local Tibetan people gathered at the roadside, next to what used to be their homes. Old-fashioned mud and wooden houses came tumbling down. People scrabbled with their bare hands, trying to dig out those who had been trapped in the debris. Concrete structures cracked and tilted. No one can live in them now.

    The government says 85 percent of houses in Jiegu, the main town in Yushu County, collapsed. The first pictures to emerge were from a surveillance camera mounted on a police car. The security services watch this area closely, because the Tibetans there are fierce followers of the Dalai Lama, and suspicious of the Chinese government.

    But police and soldiers were desperately needed today.

    Immediately after the quake, 700 locally-based People's Armed Police started to rescue the wounded. A technical school collapsed, bringing memories of the children who died in shoddily built schools in the Sichuan earthquake in 2008. Rescue workers and anyone strong enough tried to pull survivors from the rubble, but they found bodies, too. Nearly 4,000 injured people are reported to have been rescued by hand. Hospitals are full, and some people are being treated in a stadium. Across China, reinforcements were readied. Rescue workers prepared to fly to the nearest commercial airport, 500 miles from the epicenter. Firefighters were driving from Golmud, a 1,200-kilometer road journey. Elsewhere, soldiers loaded rice onto trucks to take in. The quake hit one of the poorest and coldest parts of the country. Food, shelter materials and water equipment will be urgently needed.


    Two years ago, the far more powerful earthquake in Sichuan Province killed nearly 90,000.

    In Northeast India, a tropical cyclone swept ashore without warning overnight. It killed at least 89 people and left thousands homeless. The storm's winds topped 100 miles an hour, and demolished more than 50,000 mud and-straw huts across two Indian states. Villagers were caught unprepared because no alert was issued.

    Research published today in Britain triggered a new debate over how many women die in pregnancy or childbirth worldwide. The study, from the University of Washington, covered the years 1980 to 2008. It found the number of maternal deaths dropped more than 35 percent during that time. The medical journal "The Lancet" reported the study. Its editor said maternal health advocates asked him to withhold the findings, fearing it would hurt their fund-raising.