WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke reminded lawmakers at a closed-door meeting on Thursday that failing to address automatic spending cuts and tax increases at the end of the year could damage an already fragile economic recovery, congressional aides said.
The Fed chairman has repeatedly sounded a warning that congressional inaction on what has come to be known as "the fiscal cliff" could dent growth if left untended.
"It is very important to say that if no action were to be taken by the fiscal authorities, the size of the fiscal cliff is such that there is, I think, absolutely no chance that the Federal Reserve could or would have any ability whatsoever to offset that effect on the economy," he said at a news conference last month.
Bernanke spoke to Senate Democrats at a luncheon at lawmakers' invitation for about ten minutes and then took questions, Senate aides said.
Bernanke did not say anything to the lawmakers that he has not said publicly, and his warnings were no more dire than they have been in the past, the staffers said.
"It doesn't take a rocket scientist to be concerned about the fiscal cliff," the chairman of the Senate tax writing committee, Max Baucus, told National Journal, which first reported the meeting.
Lawmakers face the prospect of having to deal with a range of contentious fiscal issues before the end of the year.
Tax cuts enacted under former President George W. Bush expire at the end of 2012 -- which means nearly all U.S. taxpayers would have to pay more taxes unless the cuts are extended.
At the same time, $1.2 trillion in across-the-board reductions in federal programs would kick in as a result of a congressional budget compromise last year.
The United States is expected to again hit its legal borrowing limit by year end. Congress must to agree to increase the ceiling or parts of government could ground to a halt.
Memories are fresh of the last time Congress faced a debt limit increase debate, when political brinkmanship shook confidence in U.S. fiscal responsibility and led to a historic and embarrassing debt rating downgrade.
On top of that, President Barack Obama's payroll tax cut also expires December 31. In addition, unless adjusted, the alternative minimum tax (AMT) could raise taxes on more middle-income taxpayers.
(Reporting by Mark Felsenthal; Editing by Andrew Hay)