WASHINGTON, DC -- Testifying before the Joint Economic Committee (JEC), Ben Bernanke, the Chairman of the Federal Reserve, today told Congress that wages have not been growing as well as they should be, despite the fact that worker productivity is up. Real wages have not grown at the pace wed like to see, said the Fed Chairman. And most puzzling, real wages have not apparently caught up with the productivity boom that weve seen going on in the economy. In his opening statement, U.S. Senator Jack Reed (D-RI), the top Senate Democrat on the JEC, said that too many Americans have not benefited from this recovery, and workers have to stretch their paychecks farther in the face of soaring gas prices. Strong productivity growth has shown up in the bottom lines of shareholders but not in the paychecks of workers, said Reed. Too many Americans are being squeezed by stagnant incomes and rising costs for gasoline, health care, and education. It seems to me that there is still room for real wages to catch up with productivity before the Fed needs to worry about inflationary pressures from the labor market. Chairman Bernanke said that the economy has been performing well and that near-term prospects look good, but he also warned lawmakers that the residential housing market was softening and that increasingly high oil prices could hinder economic growth and cloud the inflation outlook. Energy prices have been pushing up overall inflation for some time, but last month we saw an uptick in the core inflation, which might be an early sign that businesses are starting to pass on their higher energy costs to customers, said Reed. Rising oil prices, interest rates, coupled with a weakening housing sector, could take their toll on consumers and businesses alike and slow down the economy. Reed lamented the fact that the Bush Administrations bloated budgets and lack of fiscal restraint have jeopardized Americas strong economy. We no longer have the fiscal discipline that we had in the 1990s, which allowed for monetary policy that encouraged investment and long-term growth, said Reed. The president's large and persistent budget deficits have led to an ever-widening trade deficit that forces us to borrow vast amounts from abroad and puts us at risk of a major financial collapse if foreign lenders suddenly stop accepting our IOUs. In this environment, it is hard to understand why the Administration is continuing to pursue policies that add to the budget deficit by providing tax breaks to those who are already well-off, including the permanent elimination of the estate tax. Meanwhile, they continue to propose budgets that cut programs for those who are struggling to make ends meet, concluded Reed.