WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke has bluntly warned Congress that it risks a recession if it fails to act on the administration's 700-billion-dollar bailout plan.
He tells the Senate Banking Committee that credit markets would dry up, leaving companies without the capital needed to expand and consumers without access to loans to buy big-ticket items such as cars and homes.
That in turn, he says would result in lost jobs, "more houses will be foreclosed upon" and "the economy will just not be able to recover in a normal, healthy way."
Still, the plan is being sharply criticized by congressional Republicans. Kentucky Senator Jim Bunning calls the plan "financial socialism" and "un-American." The Republicans say the sheer size of the plan would take $2,300 from every man, woman and child in the United States.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
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