Without Bailout, Recession Likely: Bernanke

Markets in 'fragile condition,' Fed chair warns Congress
By Newser Editors and Wire Services
Posted Sep 23, 2008 2:47 PM CDT
Treasury Secretary Henry Paulson, Federal Reserve chief Ben Bernanke and Securities and Exchange Commission chair Christopher Cox testify before the Senate Banking Committee today.   (AP Photo)
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(Newser) – Ben Bernanke bluntly warned Congress today that they risk a recession if they fail to pass the Bush administration's $700 billion plan to bail out the financial industry. "The financial markets are in quite fragile condition and I think absent a plan they will get worse," Bernanke said, warning that failed credit markets would lead to more job losses, foreclosures and GDP contraction.

The atmosphere was far from chummy in the Banking Committee hearing. "Just because God created the world in seven days doesn't mean we have to pass this bill in seven days," said Rep. Joe Barton. Added fellow GOP Rep. Darrell Issa, "I am emphatically against it." Despite expressions of unhappiness in both parties, the prospects for legislation seemed strong, with lawmakers eager to adjourn this week or next for the elections.