Senate Panel Approves Second Term For Bernanke

Federal Reserve Chairman Ben Bernanke won approval for another term from the Senate Banking Committee today. The committee voted 16-7 to send Bernanke's nomination to the full Senate, where at least three senators have already placed holds on the nomination.

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Time Magazine's Person of the Year will get another four years in his job. Ben Bernanke, chairman of the Federal Reserve, easily won approval for a second term today from the Senate Banking Committee. Still, most Republicans voted no, along with one Democrat.

As NPR's Audie Cornish reports, even Bernanke's backers expressed serious reservations.

AUDIE CORNISH: If anyone thought that being named Person of the Year by Time Magazine would endear Federal Reserve Chairman Ben Bernanke to the Senate Banking Committee, well, they were wrong.

Senator JEFF MERKLEY (Democrat, Oregon): Dr. Bernanke's approach helped set our economic house on fire.

CORNISH: Liberal Democrat Jeff Merkley of Oregon was among those who accused the Fed chairman not only of ignoring warning signs when the financial markets were in trouble, but also of supporting policies that added fuel to the fire.

Senator MERKLEY: Since then, Dr. Bernanke has shown himself to be quite adroit with the fire hose, helping to put that fire out. But as we look to the future, I think we need to look for leadership that will be adept at rebuilding our economic house.

CORNISH: Merkley voted no, along with six Republicans. The total vote was 16 to 7 in favor of the Fed chair. Bob Corker of Tennessee was among the few Republicans who supported Bernanke.

Senator BOB CORKER (Republican, Tennessee): I mean, I don't think there's any regulator that didn't make mistakes leading up to this. Do I think that the experience of Chairman Bernanke has had over the last year-and-a-half makes him by far the most well-equipped person to lead the Fed over the next several years, I do.

CORNISH: Most Republicans agreed with arguments by ranking member Richard Shelby, that the steps Bernanke took to save mega firms and provide emergency lending to Wall Street were ad hoc and lacking in transparency.

Senator RICHARD SHELBY (Republican, Alabama): I do not believe that monetary policy during the recent crisis, in which in some instances was effectively fiscal policy, was coherent, insistent or predictable.

CORNISH: Banking chairman Chris Dodd led the majority in firmly supporting Bernanke, saying the Fed chairman played a critical role in preventing large firms from dragging down the entire economy. But that support came with a warning.

Senator CHRISTOPHER DODD (Democrat, Connecticut): But I want to be clear that with my support comes my insistence that we carefully examine the role of the institution that runs the risk of becoming too complicated to succeed.

CORNISH: The committee is now working on a financial overhaul bill that could strip the Federal Reserve of its regulatory power over banks. So, while Bernanke's confirmation by the full Senate is nearly assured, the powers of the Fed are not.

Audie Cornish, NPR News, the Capitol.

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