Sen. Johnson credits government action for buoying economy

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WASHINGTON — Sen. Tim Johnson said government action prevented the American economy from getting worse in the last few years and more is needed now.

“While the economy is not growing as fast as we would like, it’s important to recognize that it would not be growing at all if Congress and the Federal Reserve had not taken action to restore financial stability,” Johnson said in opening remarks of a Banking Committee hearing Tuesday. “The Wall Street Reform Act created a framework for a financial system that is stable, works in the consumer’s interest, and never again allows bank bailouts.”

Johnson, D-S.D., also said he backs President Obama’s plans to extend expiring tax cuts for the middle class and wants to make it easier for homeowners to lower their interest rates.

Johnson, the chairman of the Senate Banking Committee, held a hearing on the Federal Reserve Bank’s Semiannual Monetary Report to the Congress. The committee heard from Fed Chairman Ben Bernanke, who provided a dire outlook on the nation’s economic future.

The South Dakota senator didn’t paint as bleak a picture as Bernanke.

“While the Fed’s role in the economy is important, we need to acknowledge that the Fed cannot solve all of the economy’s problems,” Johnson said. “The housing market has been holding back the economy for too long, and I ask this committee to support efforts of my colleagues to enact legislation to give responsible homeowners the opportunity to refinance their mortgages.

“This legislation is fair because it helps homeowners who have been playing by the rules; it’s market-friendly because it eliminates barriers to competition; and it’s a cost-effective way to jump-start the economy because it keeps more of workers’ paychecks in their pockets.”

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