Chairman of the Federal Reserve Ben Bernanke has come out in support of maintaining the Bush tax cuts saying that it would be a means of stimulus for the U.S. economy.
Just hours before, U.S. Treasury Secretary Timothy Geithner said that the Obama administration would allow the tax cuts to expire. Geithner’s hand was forced after three Senate Democrats came out in support of extending the cuts.
Both the Fed and the administration agree that the economy needs some other kind of additional stimulus. But the administration is refusing to consider Bernanke’s position that the tax cuts could be a means of further stimulus.
This could lead to a conflict between the two parties.