Bernanke wins 2nd term as Fed Reserve chair, but barely
WASHINGTON - Embattled Federal Reserve Chairman Ben Bernanke won confirmation for a second term yesterday, but only by the closest vote ever for the crucial post and after withering criticism from lawmakers for bailing out Wall Street while other Americans suffered in recession.
The Senate confirmed Bernanke for a new four-year term by a 70-30 vote, a seemingly solid majority but 14 votes worse than the closest previous vote for a Fed chairman.
President Barack Obama hailed the Senate's action and praised Bernanke's "wisdom and steady leadership."
The battle over Bernanke's confirmation has been a test of central bank independence, a crucial element if the Fed is to carry out unpopular but economically essential policies. Its decisions on interest rates can have immense consequences, from the success or failure of the largest companies to the typical home buyer's ability to get an affordable loan to the price of cereal at the grocery or gas at the corner station.
"Bernanke fiddled while our markets burned," huffed Richard Shelby, of Alabama, the top Republican on the Senate Banking Committee, during yesterday's debate. "Ben Bernanke's Federal Reserve played a key role in setting the stage for the financial crisis."
Shelby and other opponents blame Bernanke for failing to spot problems leading up to the crisis, for lax bank regulation and for not cracking down on dubious home mortgage practices. All those missteps contributed to the recession, they contend.
Supporters see it far differently, crediting him with preventing the Great Recession from turning into the second Great Depression.
"The chairmanship of Ben Bernanke has in no small measure made it possible for this nation to avoid a catastrophe," said Senate Banking Committee chairman Christopher Dodd (D-Conn.).
Supporter Charles Schumer (D-N.Y.) worried that the bitter fight over the nomination would send "the message that the Federal Reserve and its monetary policy decisions are under the thumb of Congress. Businesses will be faced with the prospect that the Fed might not be able to do what's necessary for the economy because of pressure from Congress."
Bernanke's current term expires Sunday.
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