. >> steve beckner of market news international, mr. chairman. when you speak of the fiscal cliff, typically you don't differentiate between the automatic tax hike and the automatic spending cuts, which leaves the impression you're giving equal weight to both sides. some would contend that the automatic tax hikes would be more onerous. how do you -- how do you parse relative importance of those two aspects? and if i may be permitted, i'm also curious to know how the fed is going to conduct open market operations if, as the new york fed statement says, by the end of this year they'll essentially have no short-term securities to use. >> well, on the fiscal cliff, i mean, just the way that the programs are set up, the dollar amount associated with the tax expirations -- tax cut expirations, including the payroll tax cut and so on, is larger than the spending cuts, as i understand it. but i'm not making any judgment about individual programs. the point here is that putting all these things together, you have a very substantial withdrawal of income fr

. >> steve beckner of market news international. mr. chairman, when you speak of the fiscal cliff, i you typically do not address the tax portion of that, which gives me the impression you're giving equal weight to both sides. some would contend the automatic tax hikes would be more onerous. if i may be permitted, i am also curious to know -- how are we going to continue market operations if by the end of this year we essentially have no short-term securities to use? >> their fiscal clef, the way the programs -- fiscal cliff, the way the programs are set up, the tax cut expiration's, including the payroll tax cut and so on, is larger than the spending cuts, as i understand it. and not making any judgment about individual programs. the point is, putting all these things together, you have a very substantial withdrawal of income that will affect the ability to be recovered in the short run. again, they are making decisions about how to modify these changes. what is the sufficient tax structure? those are tough decisions congress has to ma

. >> steve and then -- >> steve beckner, market news international, mr. chairman.cal cliff, typically you don't differentiate between the automatic tax hike aspect of that and the automatic spending cuts which leaves the impression you're giving equal weight to both sides. some would contend the automatic tax hikes would be onerous. how do you parse the relative importance of those two aspects? if i may be permitted, i'm also curious to know how the fed will conduct open market conventions if as the new york fed statement says at the end of the year they'll have essentially no short-term securities to use. >> well, on the fiscal cliff, i mean, just the way that the programs are set up, the dollar amount associated with the tax expirations, tax cut expirations and including the payroll tax cut and so on is larger than the spending cuts as i understand it. but i'm not making any judgment about individual programs. the point here is putting the things together you have a very substantial withdrawal of income from the economy that will affect spending. and will affect