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An Egyptian prosecutor on Thursday charged 25 Mubarak-era officials with manslaughter, attempted murder and assault for their part in organizing a February attack on anti-regime protesters in which assailants on horses and camels charged into crowds, Egypt’s official news agency reported.

Those to stand trial included the speakers of parliament’s two chambers, lawmakers from Hosni Mubarak’s ruling party, Cabinet ministers and business people, the Middle East News Agengy said. It gave no date for the start of the trial.

The Feb. 2 attack on the protesters came during an 18-day uprising that forced Mubarak to step down on Feb. 11.

The assault, carried live on regional television channels, provided protesters with what they took to be solid proof that Mubarak’s regime was desperate and teetering on the brink of collapse. The initial attack sent protesters at Cairo’s Tahrir Square, the epicenter of Egypt’s revolution, running away from the assailants, armed with whips and swords. However, many protesters later found the courage to pounce on the attackers, wrestling them down to the ground before beating them.

Feb. 2 was among the most violent days of the uprising, with protesters and Mubarak loyalists fighting it out at Tahrir Square and adjacent streets with rocks, firebombs and slabs of concrete. The fighting lasted the whole day and well into the night.

At least three people were killed and 600 others were wounded that day.

The horse and camel charge have become known as “The battle of the Camel.”

The two speakers charged in the case, Fathi Surour and Safwat el-Sharif, are facing separate charges of corruption and are expected to stand trial for them too.

The 83-year-old Mubarak is scheduled to face trial next month for ordering the use of deadly force against the protesters. More than 800 protesters are believed to have been killed in the uprising.

News of the charges being brought came before massive protests planned for Friday to demand justice for the revolution’s victims as well as measures to purge former regime officials from political and economic life. The Muslim Brotherhood, Egypt’s most organized political movement, has said it will join the pro-democracy demonstrators at Cairo’s Tahrir Square, the epicenter of the revolution, for the so-called “Friday of Accountability.”

Justice for those who killed demonstrators has become a rallying point for the protest movement, nearly five months after Mubarak’s ouster after a nearly three-decade rule marred by complaints of widespread corruption and police abuse.

Many Egyptians believe that Mubarak and some of his regime’s much-hated faces have been removed but the pillars of his regime are still in place, including such key institutions as the judiciary, the police and civil service.

In a bid to defuse rising anger, the Interior Ministry announced Wednesday that hundreds of high-ranking police officers will be sacked for their role in the harsh crackdown on anti-government protests. Interior Minister Mansour el-Essawi said in a statement that it will be the largest shake-up in the history of his ministry.

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The big news these days is who isn’t running for president. Without Mike Huckabee and Donald Trump, the Republican contest will be less colorful, of course, but also even more unsettled than it has been for the last few months. That leaves room for another Mormon governor and businessman.

Last week I had a chat with Jon Huntsman, the former Utah governor who resigned as the Obama administration’s ambassador to China last month. It was one of only a couple of conversations he’s had with a reporter since he dipped his toe in the water. And it left me convinced that, though not yet registering in polls, he may be the big new Republican face of 2012.

Huckabee’s departure leaves a big “likeability gap” in the Republican field. It sure isn’t going to be filled by Newt Gingrich, whose smiles for David Gregory on “Meet the Press” last week hardly erased his “Gingrich who stole Christmas” impression with voters. The other candidate waiting offstage is Indiana governor Mitch Daniels, the latest crush of establishment Republicans and deficit hawks, despite his record presiding over the most profligate spending in the history of the Republic as George W. Bush’s budget director.

The two other plausible nominees, Mitt Romney and Tim Pawlenty, are hardly running away with the likeability primary. Huckabee memorably noted in 2008 that Romney would remind voters of the boss who laid them off. Pawlenty isn’t actively unlikeable, but his charm seems written in invisible ink. Discounting the nerd-chic of Ron Paul, Huntsman will be the coolest guy in the race.

Mormon Rock

Huntsman played the keyboard in a rock band as a teenager, speaks fluent Mandarin (learned while on his Mormon mission), loves Motocross and has adopted children from China and India. He wears his Mormonism lightly (a daughter is about to be married outside the faith), looks sharp in his bomber jacket and has an attractive wife. He has executive experience at his family’s chemical company. It doesn’t hurt that he seems smart, has millions in the bank (his father invented the “clamshell” container that Big Macs were once packaged in) and has already hired top-flight political operatives like John Weaver, who ran John McCain’s 2000 presidential campaign. Most important, from Huntsman’s perspective, is that he boasts a conservatism-that- works record in Utah.

Line of Attack

Huntsman intends to directly attack the health-care law that Romney passed in Massachusetts, which later became a model for President Obama’s efforts in Washington. He will try to sell the health-insurance plan he implemented in Utah, without any mandates, as the right plan at the right time for the American right. The idea is to use health care against Romney the way Obama used the Iraq war against Hillary Clinton in the 2008 Democratic primaries: as a way of convincing the base that he’s closer to them on their No. 1 issue. Repeal of Obamacare is the only stance that unites all Republicans, and the candidate who masters that message has an inside track to the nomination.

Huntsman’s liabilities are also considerable fast cash. As a Mormon, he won’t have much appeal among the evangelicals who make up about a third of Republican primary voters (whose support is likely to be split between Pawlenty and Michele Bachmann). He was receptive to federal stimulus dollars as governor, and once supported a cap-and-trade plan to reduce greenhouse gases in Western states (which he has since distanced himself from). Reporters haven’t yet begun to pore over his personal life in detail.

Working for Obama

Huntsman’s biggest stumbling block, of course, is that he served in the Obama administration, which for the birthers, haters and assorted nasties who make up a sizeable chunk of the Republican base will be a deal-breaker. When I asked Huntsman about the effusive letters of praise he wrote to Obama and to former President Bill Clinton — he called Obama “a remarkable leader” and praised Clinton’s “brilliant analysis of world events” — he dismissed them as “thank you notes.”

Aides say that Huntsman’s tie to the Obama administration is only a problem until people hear that he also served as an ambassador under George H. W. Bush (to Singapore) and worked for the second President Bush and for Ronald Reagan. They think that his foreign policy credentials will serve him well through the debates.

We’ll see. Huntsman will have to walk a fine line between criticizing Obama’s foreign policy and seeming ungrateful for his appointment (though that might not be a problem with primary voters). He will give a speech soon laying out his worldview, but he hinted to me that he didn’t think Obama had been tough enough in stressing “values” over “perceived interests.”

China Question

On the question of China’s rise, he thinks that while the Chinese will pass the U.S. in “sheer output” in the next couple of decades to become the largest economy in the world, it will be 75 to 100 years before they catch up technologically and beat the U.S. on what he considers the more relevant economic statistic of per-capita GDP.

My sense is that in the cattle calls to come Huntsman will get the blue ribbon from the press and from Republicans looking for the strongest candidate in a general election against Obama. In the past, neither of these factors have had much impact on Republican primary voters. But it’s worth remembering that just a few years before becoming the 2008 Republican nominee, John McCain had a voting record so Democratic that he nearly accepted entreaties to switch parties. And being the press’s darling certainly never hurt McCain.

Huntsman’s fate, then, may be less tied to his personal image than to how Republicans make sense of what may be the most wide-open field since Wendell Willkie won their nomination in 1940.

(Jonathan Alter, author of “The Promise: President Obama, Year One,” is a Bloomberg News columnist. The opinions expressed are his own.)

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NATO said Saturday it cannot confirm a Libyan government claim that 11 Muslim clerics were killed in an airstrike in eastern Libya but regrets “any loss of life by innocent civilians” whenever it occurs.

NATO has been intensifying airstrikes against Gadhafi’s troops in several areas of Libya in a bid to weaken his brutal crackdown against a rebel uprising. Four explosions _ most likely from NATO strikes _ were heard in Tripoli early Saturday.

On Friday, the government accused the alliance of killing the 11 clerics as they were sleeping in a guesthouse. Government spokesman Moussa Ibrahim said those killed were part of a group that had gathered to pray for peace in the oil town of Brega. He said 50 people also were wounded, including five in critical condition.

In a statement Saturday, NATO said the building struck had been “clearly identified as a command and control center.” It said it could not confirm civilian deaths but did not deny them either.

The Brussels-based alliance took over command of the air campaign on March 31 with a mandate to protect civilians from government attacks. It repeatedly has said all its targets in Libya are military and that it is not targeting Gadhafi or other individuals.

In a defiant audio recording plays on state TV, the Libyan leader taunted NATO, saying he is alive despite a series of airstrikes and “in a place where you can’t get to and kill me.”

Gadhafi had appeared on state TV but had not been heard speaking since a NATO attack on his Tripoli compound two weeks ago, which officials said killed one of his sons and three grandchildren. In a brief recording played Friday on Libyan TV, Gadhafi said he wanted to assure Libyans concerned about a strike this week on his compound in Tripoli.

“I tell the coward crusaders _ I live in a place where you can’t get to and kill me,” he said. “I live in the hearts of millions.”

He referred to a NATO airstrike on Thursday that targeted his Bab al-Aziziya compound in Tripoli.

Many people “driven by their love for me put in many calls to check on my well-being after they heard of the cowardly missile attack of the crusaders on Bab al-Aziziya last Thursday, May 12,” Gadhafi said in the recording, which lasted just over a minute.

Hours later, explosions again thundered across Tripoli.

Another government spokesman, Ibrahim Uthman, said Saturday’s strikes targeted the country’s Agriculture Ministry. The same building, however, was targeted days ago and, at the time, residents said it was a government intelligence building instant payday loan.

Reporters could not immediately verify the information. They may only leave their hotel in the company of government officials.

The international community also has stepped up efforts to increase pressure on the regime and has been eager to show signs of progress in the bombing campaign, first led by the U.S. and now overseen by NATO.

President Barack Obama’s national security adviser, Tom Donilon, met Friday at the White House with a senior Libyan opposition delegation. While the U.S. stopped short of recognizing the Libyan Transitional National Council as Libya’s legitimate government, which France and Italy already have done, the White House said in a statement after the meeting that the council is a “credible interlocutor of the Libyan people.”

Obama did not meet with the opposition leaders, but the White House and NATO promised to continue military operations in Libya as long as Gadhafi keeps attacking his people.

The White House also said it was looking for ways to increase U.S. financial support to the opposition, in part through congressional legislation that would free up a portion of the more than $30 billion in frozen Gadhafi regime assets in U.S. banks so it could be used to aid the rebels.

The rebels have said they need up to $3 billion in coming months for military salaries, food, medicine and other supplies. They also say no country has sent the arms they desperately need.

Libyan opposition representative Mahmoud Jibril also planned to meet with French President Nicolas Sarkozy later Saturday in Paris.

A local activist also said Saturday that he witnessed some 50-60 residents attacking military trucks late Friday in the western neighborhood of Abu Sitta. He said the events took place in the late evening on Friday. The physican-turned-activist said the residents burnt down a military truck.

“Everybody escaped after some cheering,” the activist said. His statements could not be independently confirmed.

The rebels control most of eastern Libya, while Gadhafi controls most of the west, including Tripoli. Misrata _ about 125 miles (200 kilometers) southeast of Tripoli _ is the only rebel stronghold in the west.

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Global stocks sank Monday after a leading credit ratings agency warned of a deteriorating U.S. financial position and investors fretted over a debt default by bailed-out Greece.

Though Standard & Poor’s reaffirmed its triple A rating on the U.S., it downgraded its credit outlook to negative from stable, citing a “material risk” that policymakers won’t be able to agree on a plan to deal with the “very large” budget deficit.

“While it has been widely recognized that the U.S. credit rating may have been at some risk of a downgrade for years, S&P’s action still comes as a major wake-up call for policymakers, and investors,” said Douglas Porter, deputy chief economist at BMO Capital Markets. “This may well prompt more forceful action on the deficit in the next two years, which in turn will act as a more forceful drag on the economic recovery.”

The markets were certainly shocked by the announcement and stocks fell sharply.

In Europe, the FTSE 100 index of leading British shares closed down 2.1 percent to 5,870.08 while Germany’s DAX slid 2.1 percent to 7,026.85. The CAC-40 in France ended 2.4 percent lower at 3,881.24.

On Wall Street, the Dow Jones industrial average was down 1.7 percent at 12,132 around midday New York time while the broader Standard & Poor’s 500 index fell 1.5 percent to 1,299.59.

Stocks in Europe had already been trading lower amid mounting concerns over a possible Greek debt default. In addition, huge election gains for a nationalist euroskeptic party in Finland added to the tensions over Europe’s debt crisis. Portugal also began discussions on a financial bailout and Spain had to pay much higher interest rates to borrow in the markets.

The renewed focus on Greece’s debts came after suggestions the country would be better off looking for a way to renegotiate its debts

A restructuring would reduce Greece’s debt pile and possibly bring a quicker end to the painful austerity measures, but it would entail huge costs to Greece’s future ability to borrow money. It also would risk a massive blow to the country’s banks, which are big holders of Greek bonds, and hurt many German and French banks too.

There’s also fear that a Greek default would motivate Ireland and Portugal to seek a similar way out from their debt stranglehold.

As Greek officials continued to deny that restructuring was an option, Portugal began its quest for its own financial assistance Monday, with the finance minister meeting delegations from the European Commission, the European Central Bank and the International Monetary Fund. A key topic will center on the interest rate charged for Portugal’s expected euro80 billion ($114 billion) bailout.

Investors’ debt concerns swelled following the news that a euroskeptic party in Finland had made big gains in Sunday’s election.

“The victory of the True Finns party in yesterday’s general election in Finland will make further bailouts much more difficult to achieve,” said Gabriel Stein, an analyst at Lombard Street Research. “Conversely, it makes sovereign defaults far more likely.”

The raft of debt crisis news hit the euro hard, though the S&P warning _ perhaps counterintuitively _ helped the dollar post gains. The U.S. currency is often considered a safe haven in times of uncertainty.

By late afternoon London time, the euro was down 1.4 percent at $1.4215, a little above its earlier low of $1.4157.

Earlier in Asia, the main focus was on China’s latest monetary tightening in response to figures Friday showing inflation running at a 32-month high in March. On Sunday, the People’s Bank of China announced that the deposit reserve ratio for most banks would be raised _ the fourth reserve increase this year.

Beijing’s failure to cool prices and growth have frustrated communist leaders who also face mounting foreign pressure to allow China’s yuan to rise in value and narrow its swollen trade surplus. Premier Wen Jiabao last week called for authorities to step up the anti-inflation fight.

China’s weekend moves weighed on markets across the region.

Japan’s Nikkei 225 index fell 0.4 percent to close at 9,556.65, while Hong Kong’s Hang Seng dropped 0.7 percent to 23,830.31, and South Korea’s Kospi slipped 0.1 percent to 2,137.72.

However, mainland China’s Composite Index rose _ 0.2 percent to 3,057.33, its highest close in five months. The smaller Shenzhen Composite Index was up marginally to 1,281.99.

Benchmark crude for May delivery was down $2.80 to $106.87 a barrel in electronic trading on the New York Mercantile Exchange.

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Italy is warning that it will review the use of its bases by coalition forces for strikes against Libya if the mission doesn’t pass to NATO’s command.

Foreign Minister Franco Frattini issued the ultimatum Monday after Turkey blocked NATO from approving a military strategy that would allow NATO’s participation in the operation.

Italy has allowed seven military bases to be used, and six Italian Tornados took part in operations over Libya on Sunday.

Italian news organizations report that Frattini told a press conference in Brussels that if the mission doesn’t pass to NATO’s command, “Italy will begin reflecting on the use of its bases: if there is a multiplication of command centers, we must study a way in which Italy retakes control of its bases.”

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

LONDON (AP) _ U.K. Prime Minister David Cameron said Monday that coalition forces have neutralized Libyan air defenses and helped avert a bloodbath in the North African country.

The prime minister told British lawmakers that Moammar Gadhafi had violated a U.N. Security Council resolution by moving troops toward rebel-held cities and also had lied to the international community.

“Gadhafi responded to the U.N. resolution by declaring a cease-fire, but straightaway it was clear he was breaking that promise,” Cameron told lawmakers guaranteed online personal loans.

Cameron stressed that through airstrikes, coalition forces helped avert what could have been “a bloody massacre in Benghazi.”

The aims behind coalition airstrikes _ which Cameron called “necessary, legal and right” _ were to suppress Libyan air defenses to enable the enforcement of a no-fly zone and to protect civilians.

“Good progress has been made on both fronts,” Cameron said, stressing that all action was taken with the support _ and even invitation _ of Arab nations. He went on to say that he sought to build the “widest possible coalition” for action in Libya.

Cameron declined to specify if Gadhafi is himself a potential target of the airstrikes _ saying he would not go further than addressing that targets are chosen to help avert attacks on civilians and to implement the no-fly zone.

“Many people will ask questions I’m sure today about regime change and Gadhafi,” the prime minister said. “I’ve been clear; I think Libya needs to get rid of Gadhafi. But in the end we are responsible for trying to enforce this Security Council resolution. The Libyans must choose their own future.”

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Businesses and universities across the St. Louis region scrambled Friday to ensure that their employees and students in earthquake-ravaged Japan were safe in the aftermath of that country’s worst earthquake.

Most of those with a St. Louis connection live and work outside the area hardest hit by a tremblor that registered magnitude of 8.9.

“We’ve reached out and confirmed that all of our employees are safe and accounted for. Our hearts go out to our colleagues in Japan and everyone who has been impacted by this devastation,” said Kathleen Manning, a spokeswoman for Monsanto Corp.

All 20 Monsanto employees were safe, said Manning.

The reports were the same from representatives of Energizer Holdings, Emerson and other area companies with employees stationed in Japan.

Electric appliance manufacturer Emerson has 800 workers spread across 20 facilities in Japan.

“We’ve been able to confirm the safety of everyone we have been able to reach so far,” said spokesman Dave Baldridge said. “As you might expect, communications have been challenging, so it is too early to assess the total impact on Emerson facilities.”

Washington University and Webster University also reported that students in foreign study programs escaped injury in the quake, which struck Sandei in northern Japan midafternoon Friday. Azusa Tanaka, a librarian in Washington University’s East Asian Library, said she had been in contact with various family members in Japan, including her mother, whose train from Tokyo to Kyoto was delayed for several hours while inspectors made certain the tracks were safe.

“She said she felt a big shaking in the train. I guess she was really scared,” Tanaka said.

Doug Lerner, a Tokyo resident who maintains a home in Lafayette Square, was grocery shopping when the earthquake struck.

“People ran out of the supermarket, and I had to hold on to a bicycle post to stop from falling over,” Lerner wrote in an e-mail. He returned home to find that his residence was not damaged.

Still, Lerner was awakened by aftershocks through the night.

Lisa Brown, Tim Barker and Georgina Gustin of the Post-Dispatch contributed to this report.

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U.S. retail sales probably climbed in February by the most in four months, spurred by job growth and more seasonable temperatures, economists said before a report this week.

The projected 1 percent gain would follow a 0.3 percent January increase, according to the median forecast of 63 economists surveyed by Bloomberg News ahead of Commerce Department figures March 11. Other reports may show the trade deficit widened in January and consumer confidence fell this month as gasoline prices rose.

J.C. Penney and Macy’s Inc. (M) were among retailers that topped analysts’ sales estimates, a sign household spending regained momentum after a weather-restrained January. While higher fuel costs may be concerning Americans, bigger paychecks thanks to the tax compromise reached by President Barack Obama and congressional Republicans are probably preventing demand from slipping for now.

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Japanese Prime Minister Naoto Kan is projected to break his fiscal promise of capping bond sales as he struggles to secure revenue, boosting the case for higher taxes to contain the world’s largest public-debt burden.

Japan’s new bond sales will expand to 46.7 trillion yen ($563 billion) in the year starting April 2012, surpassing Kan’s target of 44.3 trillion yen, according to calculations by the Cabinet Office released in Tokyo today.

Breaking his year-old spending pledges may push up government borrowing costs of around 1.2 percent. The premier this month called for a national debate to raise the nation’s 5 percent consumption tax and tapped Kaoru Yosano, a former opposition lawmaker and finance minister, as his fiscal policy minister to push through changes needed to curb the debt load.

“It’s a miracle that Japan’s 10-year government bonds yields have remained at extremely low levels,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “Raising the sales tax would reduce the risk of higher long-term interest rates, but the question is whether Kan can push it through amid falling popularity and opposition from members of his own party.”

The yield on the benchmark 10-year bond rose to 1.215 percent as of 9:22 a.m. in Tokyo. It touched 1.26 percent in Jan. 19, the highest since Dec. 16.

Hurt Credibility

“If the unhealthy situation continues for a long time, long-term interest rates will inevitably rise and hurt Japan’s global credibility,” Economic and Fiscal Policy Minister Yosano said on Jan. 14.

Kan pledged in June to balance the nation’s budget by fiscal 2020 as well as cap new bond issuances and spending for the next three years. He was able to meet that promise when compiling his fiscal 2011 budget in December by tapping into unused funds, most of which have been exhausted and cannot be relied on in future budgets.

“Our fiscal management policies were a promise we made to the world,” Finance Minister Yoshihiko Noda said in Tokyo today. “We need to do our utmost to avoid deviating from them.”

The primary deficit will be 23.2 trillion yen, or 4.2 percent of gross domestic product, in fiscal year 2020, the government said. A primary balance is achieved when revenue matches spending, excluding bond sales and interest payments flat iron.

Noda said the government’s spending goals will be subject to review in the middle of the year. He said the government isn’t planning to alter its goal to balance the budget by 2020.

Six-Month High

Costs to protect against a default by Japan reached a six- month high on Jan. 18, suggesting increasing concern about the ruling Democratic Party of Japan’s ability to control debt. Credit-default swaps, used to protect against nonpayment and speculate on changes in creditworthiness for five years, climbed to 86.49 basis points, higher than U.S. debt cost of 49.85 basis points.

“To reach a primary balance by 2020, we need reforms in both spending and revenue,” Yosano told reporters in Tokyo today. “We need to outline a comprehensive roadmap for tax reform — corporate taxes, income taxes, inheritance taxes, sales taxes — to address how we can boost revenue.”

The Cabinet Office estimate assumes nominal growth of around 1.5 percent over the next decade.

Japan’s public debt is set to exceed twice the size of the economy this year and reach 210 percent of GDP in 2012, the Organization for Economic Cooperation and Development estimates, the highest among group members. Today’s report, which uses different calculation methods, said debt will swell to twice the size of the economy in fiscal 2016.

Popularity Falls

Kan, whose approval rating halved since he took office in June, opens discussion about a record 92.4 trillion yen budget next week at parliament, where he lost ground in mid-term elections in July after he proposed increasing sales tax.

Japan in December forecast economic growth would slow to 1.5 percent in the year starting April 1 after expanding a projected 3.1 percent this year. In nominal terms, the economy will expand 1 percent, little changed from the estimated 1.1 percent, it said last month.

Recent economic data have shown signs for a recovery. Industrial production rose for the first time in six months in November and retail sales increased more than forecast. Today’s report estimates prices will stop falling next fiscal year.

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Federal Reserve Chairman Ben Bernanke told Congress Friday that there’s increasing evidence that a “self-sustaining” economic recovery is taking hold, but he said the Fed’s $600 billion Treasury bond-buying program is still needed because it will take years for unemployment to drop to more normal levels.

Testifying before the Senate Budget Committee, Bernanke offered a more optimistic outlook, saying the economy should grow more strongly this year as consumers and businesses boost their spending.

However, he said that even with the expected improvements, it could still take four to five years for unemployment to drop to a historically normal rate of around 6 percent.

Bernanke spoke one hour before the government released a disappointing employment report. Employers added only 103,000 jobs in December. The unemployment rate fell to 9.4 percent partly because people gave up looking for jobs. The report suggested only slow healing in the jobs market. Many economists had forecast much bigger job gains and were looking for a signal that a crucial corner had been turned in the labor market recovery.

Asked about Friday’s 103,000 job gains, Bernanke said if that pace of job-creation were maintained “you won’t see sustained declines in the unemployment rate.”

The Fed chief defended the central bank’s much criticized decision in November to start buying $600 billion in Treasury’s through June. And, he gave no hint that the Fed would change its course.

The bond purchases are designed to boost the economy by lowering interest rates and lifting stock prices.

The program has been criticized by Republicans in Congress and some Fed officials who contend it will do little to help the economy and could hurt it by unleashing inflation and speculative buying on Wall Street. The move heightened tensions with trading partners including China, Germany and Brazil. They complained it was really a scheme to push down the value of the dollar, giving U.S. exporters a competitive edge.

The Fed chief said the threat of deflation _ a dangerous drop in prices, wages and in the values of homes and stocks _ and the potential for persistently high unemployment were sufficient reasons for the Fed to launch the bond-buying program.

Bernanke predicted that the overall pace of the economy will be “moderately stronger” this year and said the Fed recently has seen “increased evidence that a self-sustaining recovery” is taking place guaranteed cash advance.

Factories are cranking up production. The service sector is growing at its fastest pace in more than four years. Fewer people applied for unemployment benefits over the past month than in any other four-week period in more than two years. Consumers are spending more freely, and a payroll tax cut is likely to boost their activity further.

However, there are risks _ namely a weak jobs market.

“Notwithstanding these hopeful signs … employers reportedly still reluctant to add to payrolls, considerable time likely will be required before the unemployment rate has returned to a more normal level,” Bernanke said. “Persistently high unemployment, by damping household income and confidence could threaten the strength and sustainability of the recovery,” he warned.

Bernanke said unemployment is likely to be close to 8 percent two years from now.

Another risk to the economy is a depressed housing market, where growth in foreclosures could push down home prices even more, he said.

Earlier this week, Fed officials said they think Congress’ tax-reduction plan will help bolster the economy this year and should spur more hiring.

The tax package extends tax cuts enacted by President George W. Bush in 2001 and 2003, gives a pay raise to working Americans by lowering the Social Security payroll tax, provides tax breaks to businesses and extends unemployment benefits. The package has a price tag of $858 billion over two years.

Bernanke also argue for Congress and the White House to come up with a long-term plan to reduce the government’s trillion-plus-dollar budget deficits. However, he warned them not to slash spending or boost taxes now because the economy is too fragile.

President Barack Obama’s debt commission at the end of last year failed to reach a consensus on what to do about exploding deficits. Over the coming decade government deficits are estimated in the $10 trillion range. If Congress fails to come up with a plan to curb those deficits in the long run, the economy could be hurt, Bernanke said. Big deficits could force investors to demand more returns to loan out their money to the government. Interest rates could soar, crimping spending and slowing the economy.

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