Asia-Pacific

Obama checks on Bernanke support, Senate says ok

(Agencies)
Updated: 2010-01-24 09:08

WASHINGTON: US President Barack Obama called lawmakers on Saturday to check Federal Reserve Chairman Ben Bernanke had enough support for a second term and two key senators said in a statement the nomination was on track.

In a sign of how worried the White House is about a sudden surge in opposition late last week to Bernanke's renomination, Obama contacted the Democratic Senate leadership to make sure they had enough votes.

"(The) president made ... calls to a few senators this afternoon including leadership to make sure everything on track and he has been assured that Bernanke is on track for confirmation," a senior administration official said.

Bernanke's second term suddenly appeared at risk on Friday after two Senate Democrats announced their opposition.

They joined a growing number of senators who vowed to vote against his appointment as November's mid-term elections approach against a backdrop of broad frustration with the economy and anger over the way Washington rescued banks.

The Democratic chairman and a Republican on the US Senate banking committee said on Saturday they were confident he would win the Senate's backing.

"Based on our discussions with our colleagues, we are very confident that Chairman Bernanke will win confirmation by the Senate for a second term," Senators Chris Dodd and Judd Gregg said in a joint statement.

A Senate vote on Bernanke next week "seems very likely," a Democratic aide said on Saturday.

Bernanke's current term is set to expire January 31.

'EXCELLENT JOB'

His critics say the Fed failed to prevent the recent financial crisis, the worst since the Great Depression, and combated the meltdown in a way that favored banks and others in the financial industry at the expense of ordinary citizens.

Dodd, a Democrat, and Gregg, a Republican, said media reports about Bernanke's confirmation prospects were "highlighting a very vocal opposition."

They added that Bernanke had done "an excellent job" responding to the financial crisis and they supported him because "he is the right leader to guide the Federal Reserve in this recovering economy."

Senator Dick Durbin, the No. 2 Democrat in the Senate, also said on Saturday he would vote to confirm Bernanke but planned to meet him ahead of the vote to "continue to demand ... a commitment to transparency and accountability" in Fed policy.

If the Fed "refuses to exercise its authority to demand bank reform and protect America's consumers, I will join with members of Congress to push for new laws that achieve these goals," Durbin said.

Democratic Senator John Kerry, also pledging to vote in favor of the nomination, said while he had "some concerns about the Fed's approach to banking accountability, Chairman Bernanke should not be a scapegoat for systemic failings."

Bernanke won support on Friday from Senate Majority Leader Harry Reid although he said his support was not unconditional.

With US unemployment at 10 percent and voters angry at Wall Street, members of Congress facing mid-term elections in November have come down hard on the central bank.

Opposition to Bernanke from Senators Barbara Boxer and Russ Feingold on Friday brought the total of known "no" votes among the Democratic majority to four. Many others have said they were still on the fence.

The shift was abrupt and added a new element of uncertainty for a stock market that had already been reeling in recent days. The Standard & Poor's 500 fell into the red for the year-to-date on Friday, joining the Dow and Nasdaq indexes.

Several Republicans have already come out against Bernanke and some have moved to block his confirmation, forcing Senate leaders to secure a super-majority of 60 votes in the 100-member chamber to move the nomination.

POPULAR RESENTMENT

With mid-term elections in November, many lawmakers are unwilling to take any stand that appears to benefit Wall Street. That tendency has only been sharpened since this week's Republican upset for the Massachusetts Senate seat that had been a Democratic stronghold for decades.

Large US banks, seen as the source of the financial crisis that punished the economy with the deepest recession since the 1930s, have come under pressure from Washington for their quick return to big profits and paying outsized bonuses after receiving billions of dollars in taxpayer aid.

The unemployment rate currently stands at 10 percent, with more than 15 million Americans out of work.

Bernanke, who was first named as chairman by former President George W. Bush, was nominated to a second term by Obama in August.

It is unclear what would happen if Bernanke, who is also serving a separate, 14-year term on the Fed's board, is not confirmed by the deadline. The law specifies that the vice chairman of the board, currently Donald Kohn, would serve in the "absence" of the chairman, but absence is not defined.