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(Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday warned Congress that putting off a decision on the fate of expiring Bush administration tax cuts could unsettle businesses and households, undercutting the U.S. economic recovery. With presidential and congressional elections looming in November, many analysts think Congress is unlikely to act until the final months of the year. The tax cuts expire on January 1. Bernanke told the Senate Budget Committee that lawmakers might not have the luxury of waiting. "I don't know exactly when the uncertainty would become a factor, but surely as we get closer to January 1 and Congress has not given a clear road map for how it plans to proceed, that would certainly affect planning, business decisions, household decisions, as they look ...

President Barack Obama's jobs council called on Tuesday for a corporate tax overhaul, expanded domestic drilling and new regulatory reforms, a set of proposals unlikely to provide a quick fix for high unemployment or gain much traction in an election year. A panel of business leaders advising Obama - whose re-election chances could hinge on whether he can boost the fragile U.S. economy - offered its latest job-creation prescriptions at a meeting with him at the White House. Obama's Council on Jobs and Competitiveness has generated dozens of ideas, many of them modest in scope, since it was created last February. The president has acted on many of them through his use of executive powers, but some of the larger recommendations have lagged and the overall benefits remain uncertain. "This ...

(Reuters) - President Barack Obama's jobs council is calling for a corporate tax overhaul, expanded domestic drilling and new regulatory reforms, a set of proposals unlikely to provide a quick fix for high unemployment or gain much traction in an election year. A panel of business leaders advising Obama -- whose re-election chances could hinge on whether he can boost the fragile U.S. economy - will offer its latest job-creation prescriptions at a meeting with him on Tuesday. A draft of its report was obtained by Reuters. Obama's Council on Jobs and Competitiveness has generated dozens of ideas since it was created amid political fanfare last February, but implementation of some of its key recommendations has lagged and the overall benefits remain uncertain. "There's not one silver ...

(Reuters) - After months of vitriolic discord, Republican and Democratic lawmakers were expected to vote on Monday on a White House-backed deal to raise the U.S. borrowing limit and avert an unprecedented default. The Democratic-led Senate is expected to pass the deal which raises the debt ceiling and cuts about $2.4 trillion from the deficit over the next decade. But it may face tougher opposition in the House of Representatives where both conservative Tea Party supporters and liberal lawmakers have expressed dissatisfaction with the agreement. While the deal comes just in time to avoid a catastrophic default, Washington and investors will be closely watching to see if it goes far enough to convince credit rating agencies to let the United States keep its coveted triple-A credit rating. ...

(Reuters) - President Barack Obama's Democrats and their Republican rivals were further apart than ever on Tuesday in an impasse over the government's debt limit as investors braced for a looming default and downgrade. With a deadline just a week away, the top Republican in Congress pressed his deficit reduction plan toward an expected vote on Wednesday. But it appears to have little chance of success in the face of a veto threat from Obama and opposition from fiscal conservatives in his own party. There was no compromise in sight between competing plans to raise the government's $14.3 trillion borrowing limit to avert a potential default on some of its $9.6 trillion in bonds -- which could push the United States back into recession and send shock waves through global financial markets. ...

(Reuters) - White House officials and Republican leaders scrambled on Sunday to reassure global markets the United States would avert a debt default, but the two sides gave no sign they were moving closer to a deal. White House Chief of Staff Bill Daley warned that there would be a "few stressful days" ahead for financial markets, with the deadline to lift the $14.3 trillion U.S. borrowing limit now only nine days away. Daley, appearing on the CBS television program "Face the Nation, quickly added: "In the end there's no question in my mind the government of America will not default." But the path forward toward a deal was murky. With Asian markets set to open in a few hours, Democrats and Republicans traded blame for the inability to strike an agreement. The two sides are deadlocked ...

(Reuters) - Rival plans to cut the deficit emerge almost daily: gangs, panels and commissions all trying to reach an elusive deal. There are splits between Republicans and Democrats, and mixed messages from all sides. With pressure mounting in Washington for a budget agreement that can clear a path to raise America's debt limit, only one thing is clear: nobody yet knows how to get there, and a deal appears as far off as ever. "Nobody can get a handle on this because there is no handle," said a veteran Republican strategist. "The overall picture really is as muddied and unclear as it looks. Anybody who says they know what's going to happen here is lying. They don't." The United States is set to reach its $14.3 trillion debt limit on Monday, and will only be able to avoid default until ...

Today's existing home sales figures out of the United States will likely provide less help for the USD from yesterday's downtick versus the euro, but risk aversion appears to be moving back in favor with the greenback as debt concerns in both regions favors safe-havens over higher yielding assets. Traders may want to anticipate a give-and-take trading session today as many are having difficulty assessing market direction. Economic News USD - Dollar Bearish vs. Euro despite Debt Concerns The US dollar's short-term bullish run seems to have met resistance yesterday. The EUR/USD fell to as low as 1.4310 by mid-day on Tuesday as risk aversion in the global economy helped spur growth in both the USD and JPY. However, reports out of Europe showing positive growth in manufacturing halted the ...

USD The dollar strengthened during a quiet FX session in Asia as Shanghai equities fell by approximately 3% in the aftermath of Friday's surprise reserve ratio hike by the PBoC. But the Nikkei-255 was unaffected and is unchanged at the time of writing. EURUSD traded 1.3310-1.3415, USDJPY 82.68-83.01. Friday's batch of US economic data was mixed, which contributed to a volatile session. Retail sales grew by only +0.6% (cons. +0.8%), and the University of Michigan confidence reading fell unexpectedly to 72.7 (prev. 75.5). However, industrial production rose by +0.8% in December, well ahead of the +0.5% consensus. Crucially, core CPI for December was stable at +0.8% y/y (cons. +0.7%). As a result of the data, our US economists see no reason to change their Q4 GDP forecast, and continue to ...