ACCORDING TO the conventional wisdom, the congressional supercommittee is destined to fail at its assigned task of producing at least $1.2 trillion in savings over the next decade. That wisdom may end up being accurate, but it is too early and too dangerous to meekly accept inevitable defeat. Instead, as Federal Reserve Board Chairman Ben S. Bernanke emphasized in testimony before the Joint Economic Committee last week, the task of putting the country on a stable fiscal path is too urgent to ignore and the potentially destabilizing consequences of another political failure too great to risk.
Mr. Bernanke was careful not to be inappropriately prescriptive in his advice to lawmakers, especially on the fraught question of the proper blend of spending cuts and revenue increases. But his testimony elaborated, once again, some important truths that they would be wise to heed.
First, he noted, there is no conflict between achieving fiscal stability over the longer term and not impeding an already fragile recovery in the short run. The two goals, Mr. Bernanke said, “are certainly not incompatible, as putting in place a credible plan for reducing future deficits over the longer term does not preclude attending to the implications of fiscal choices for the recovery in the near term.” Translation: Abrupt fiscal retrenchment now, whether in the form of spending cuts or tax increases, could be counterproductive to an economy that, in Mr. Bernanke’s assessment, is in danger of another recession.