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Apr 27, 2010 10:29 AM by Associated Press

Fed boss: Trim deficit or US economy will be hurt

Federal Reserve Chairman Ben Bernanke says failing to curb federal budget deficits would do "great damage" to the U.S. economy in the long run.

Bernanke once again urges the White House and Congress to come up with a credible plan to reduce the nation's red ink, which hit a record $1.4 trillion last year.

Failing to do so, he says, would push interest rates higher - not only for Americans buying cars, homes and other things - but also for Uncle Sam to service its debt payments. Bernanke says all that would sap national economic activity.

The Fed chief delivers his assessment in prepared remarks to the first meeting of President Barack Obama's commission to tackle the soaring deficit.

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