WASHINGTON — Failing to curb federal budget deficits would do "great damage" to the U.S. economy in the long run, Federal Reserve Chairman Ben Bernanke warned this morning.

Bernanke again urged the White House and Congress to come up with a credible plan to reduce the nation's red ink, which hit a record $1.4 trillion last year.

Failing to do so would push interest rates higher — not only for Americans buying cars, homes and other things — but also for Uncle Sam to service its debt payments, he said.

All that would sap national economic activity and could cause employers to cut back on hiring, Bernanke said.

The Fed chief made his most urgent call yet to get the nation's fiscal house in order. His plea came in prepared remarks to the first meeting of President Barack Obama's commission to tackle the soaring deficit.

The nation's budget deficit swelled to a record high last year as the recession took a big bite out of tax revenues, while spending rose to stimulate the economy and provide relief to struggling Americans.