Bernanke also warned that policymakers shouldn't think that growing the economy - and thus tax revenues - will remedy the situation. "Unfortunately, we cannot grow our way out of this problem," Bernanke said. "No credible forecast suggests that future rates of growth of the U.S. economy will be sufficient to close these deficits without significant changes to our fiscal policies."
Rapidly rising health-care costs and the aging of the U.S. population are among the forces putting pressure on the deficits in the years ahead, Bernanke said.
At this point, Bernanke said the impact of the recently enacted health care legislation on federal health-care spending over the long run is uncertain. However, what is clear is that continued increases in health-care costs at the rate seen in recent decades - along with a graying population - would put "enormous pressures" on the federal budget in the coming years. Controlling health-care costs is a critical part of the deficit-reduction equation, he said.
Bernanke said the federal budget currently appears set to stay on an "unsustainable path." Hard choices must be made by policymakers sooner, rather than later, to fix this, the Fed chief said.