WASHINGTON – Congressman Jeb Hensarling (TX-05), Chairman of the House Republican Conference, released the following statement in response to testimony today by Federal Reserve Chairman Ben Bernanke at a meeting of the House Financial Services Committee, where Hensarling serves as Vice-Chair.

“With the national unemployment rate at or above 8 percent for the last 36 months, Chairman Bernanke today described the economic recovery as “modest,” relative to historic terms. However, when we take into account those Americans who are underemployed and those who have given up and left the labor force all together, the real unemployment rate is 15.4 percent. With half of all Americans now classified by the Census Bureau as low income or in poverty and one in seven now relying on food stamps, the term “modest” is indeed modest. 

“We are in the midst of the slowest, weakest, recovery in the post war era, yet we are seeing the most accommodative monetary policy that we have ever seen. With recent statistics—including those provided by the Federal Reserve—showing public companies are sitting on $2.1 trillion dollars in excess liquidity and banks have $1.5 trillion dollars in excess capital, all signs point to the fact that our true challenges are on the fiscal side.

“Recently, the Dallas FED President, Richard Fisher, made me aware of a Harvard study showing the greatest impediments to job creation to be taxation, red tape, uncertainty.  A recent Gallup poll shows that roughly half of all small businesses believe that health care and government regulation is what is keeping them from hiring more workers.  Job creators like Home Depot’s co-founder Bernie Marcus are saying that, ‘I can tell you today that the impediments the government imposes are impossible to deal with.  Home Depot would have never succeeded had we tried to start today.’  I would add to that the voices of just about every small business person I have talked to in the Fifth Congressional District of Texas that I represent.  In light of this I find myself questioning not only the efficacy of current monetary policy, but the risk as well. 

“While I was pleased that Chairman Bernanke expressed concern and anxiety over our nation’s structural debt, the actions he has taken to create artificially low interest rates are masking the true cost of our fiscal folly—postponing and exacerbating the problem.”