WASHINGTON – A Senate panel on Thursday 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 for consideration. Approval came after a two-hour debate that heaped both praise and criticism on the Fed chief.
In voting for Bernanke, the panel’s chairman, Sen. Christopher Dodd, D-Conn., 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 did line 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 at the height of public anger toward the Fed.
Many ordinary Americans were disgusted by the Wall Street bailouts and hefty bonuses paid to employees of those rescued companies, while Main Street continued to suffer from rising unemployment, record-high home foreclosures and stagnant wages.
In turn, legislation in Congress would rein in the Fed’s powers, and a House-passed provision would subject the Fed to an audit by congressional investigators.
The opposition to Bernanke came from an odd coalition of liberals and conservatives.
Sen. 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 Mike Crapo of Idaho, Jim Bunning of Kentucky, Jim DeMint of South Carolina, David Vitter of Louisiana and Kay Bailey Hutchison of Texas. 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.
Dissatisfied by the bailouts, Sen. 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 supermajority of 60 votes to confirm Bernanke.
Bernanke’s term ends Jan. 31, and unless Sanders relents, a full Senate vote on his nomination is not expected until January.
Despite lawmaker anger over the bailouts and worries about stubbornly high unemployment, even some of Bernanke’s critics acknowledge that his out-of-the-box thinking helped prevent the Great Recession from turning into the second Great Depression.
“Obviously mistakes were made,” said Sen. Judd Gregg, R-N.H., who voted for Bernanke. However, assessing Bernanke’s swift reaction to the financial and economic crisis, Gregg concluded: “I tell you it worked. It’s that simple.”
Time magazine on Wednesday gave Bernanke its highest honor as Person of the Year. Bernanke’s “creative leadership” was credited with helping to assure that 2009 was a period of economic recovery rather than “catastrophic depression.”
Bernanke was first tapped to run the Fed by President George W. Bush. Before taking over in February 2006, Bernanke had served as Bush’s top economic adviser and was a Fed member when Alan Greenspan was chairman.
Most of his professional life, however, was spent in academia, including teaching economics at Princeton for 17 years.
When the full Senate took up Bernanke’s nomination to be Fed chief four years ago, only one senator – Bunning – opposed him.