HIGHLIGHTS - Bernanke's testimony on budget, economic outlook

WASHINGTON (Reuters) - The following are highlights of Federal Reserve Chairman Ben Bernanke's testimony on Tuesday to the Senate Budget Committee on the budget and economic outlook.

BERNANKE ON DEBT/GDP RATIO:

"We have to make sure that in the medium term we have a fiscal position that will allow, and I use this as a rule of thumb,...the debt-GDP ratio not to be growing so that we can assure ourselves we'll be able to finance those debts at a reasonable rate and not impose excessive burdens on our children and grandchildren.

"There is no magic number but I would hope that given that we're going to be above 60 percent I hope we don't we go higher than that. I'd like to see us try to come back down gradually over time."

BERNANKE ON DOLLAR, RESILIENCE OF U.S. ECONOMY:

"Confidence in U.S. economy is one reason why the dollar has actually done relatively well compared to some other currencies."

"I do think the American people in the past have shown an excellent ability to respond to adversity and I believe it's going to happen this time and we're going to see a much stronger economy not that far in the future."

BERNANKE ON DEMAND FOR TREASURIES:

"It's very hard to know how much higher the debt to GDP ratio could be before the international financial markets begin to balk, and so I think the prudent thing to do is try to maintain stability in the debt to GDP ratio.