House GOP budget plan won't slam economy: Bernanke (by Greg Robb)

WASHINGTON (MarketWatch) -- The House Republican plan to cut $61 billion in federal agency spending for the rest of 2011 would lower growth slightly this year but would not slam the economy as some have predicted, Federal Reserve Board Chairman Ben Bernanke said Tuesday. Democrats have cited two studies: one by Moody's Analytics predicting 700,000 lost jobs and another by Goldman Sachs predicting a big reduction in GDP. Asked about the studies, Bernanke said Fed staff analysis concluded that GDP would be cut "by a tenth or two" this year and then have an additional impact in 2012. Bernanke said he did not have the Fed's projection of the number of jobs that would be lost.