Keep Bernanke, Senate panel says

Bernanke was tapped to run the Fed by President George W. Bush, for whom he had been the top economic adviser. Bernanke was tapped to run the Fed by President George W. Bush, for whom he had been the top economic adviser.
By Jeannine Aversa
Associated Press / December 18, 2009

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WASHINGTON - A Senate panel yesterday approved the nomination of Federal Reserve chairman Ben Bernanke to run the nation’s central bank for another four years.

The Senate Banking Committee voted 16-7 to send Bernanke’s nomination to the full Senate. Approval came after a two-hour debate that heaped both praise and criticism on the Fed chief.

In voting yes, the panel’s chairman, Senator Christopher Dodd, Democrat of Connecticut, said Bernanke’s “wise leadership’’ will mean “better days do lie ahead.’’

Although Bernanke, 56, appears to have enough votes in the Senate to win a second term, six Republicans and one Democrat on the committee lined up against him. They blame him for not spotting problems that led to the financial crisis, failing to protect consumers, and supporting Wall Street bailouts.

Bernanke’s nomination comes amid public anger toward the Fed. Many ordinary Americans were disgusted by the Wall Street bailouts and hefty bonuses paid to employees of rescued companies, while Main Street continued to suffer from rising unemployment, record-high home foreclosures, and stagnant wages.

Bills in Congress would rein in the Fed’s powers, and a House-passed provision would subject the Fed to an audit by congressional investigators.

Opposition to Bernanke came from an odd coalition of liberals and conservatives.

Senator Richard Shelby of Alabama, the top-ranking Republican on the committee, was among the seven senators voting no. “Our trust and confidence were misplaced,’’ Shelby said of Bernanke’s leadership.

The others voting against Bernanke were Republicans Jim Bunning of Kentucky, Jim DeMint of South Carolina, David Vitter of Louisiana, Kay Bailey Hutchison of Texas, and Mike Crapo of Idaho. The sole dissenting Democrat was Jeff Merkley of Oregon.

“We can’t have a Federal Reserve that the majority of Americans no longer trust, and that’s what we have today,’’ said DeMint.

So dissatisfied is he by the bailouts that Senator Bernie Sanders, an independent liberal from Vermont, wants to block the nomination on the Senate floor. He has placed a “hold’’ on the nomination, meaning it will require a super-majority of 60 votes to confirm Bernanke.

Bernanke’s term ends Jan. 31, and unless Sanders relents, a full Senate vote is not expected until January.

Despite lawmaker anger over the bailouts and worries about stubbornly high unemployment, even some of Bernanke’s critics acknowledge his out-of-the-box thinking helped prevent the recession from turning into the second Great Depression.