Federal Reserve Chairman Ben Bernanke has come under fire from angry lawmakers at a Senate Banking committee hearing Thursday. President Barack Obama has nominated Bernanke for a second four-year term, but the Fed chairman had to defend his record and his decision to bail-out major banks over the past two years to try to prevent an economic meltdown.
It was a rough day on Capitol Hill for Bernanke, as he faced intense anger from several senators for bailing out Wall Street banks and other financial institutions, while millions of Americans are out of work and facing foreclosure on their homes.
Republican Senator Jim Bunning of Kentucky, a conservative, went on the attack, accusing the Federal Reserve Chairman of failing to recognize obvious signs that the housing bubble was threatening the overall economy, of bowing to pressure from Wall Street, and of abusing the central bank's powers to bail out large financial institutions.
"I will do everything I can to stop your nomination, and drag out this process as long as I can. We must put an end to your and the Fed's failure, and there is no better time than now," he said.
Bunning said that Bernanke's bailout of the troubled New York-based insurer American International Group alone would be reason enough to send the former Princeton professor back to campus.
On the other side of the political spectrum, Independent Senator Bernard Sanders of Vermont agreed that Bernanke should lose his job. Speaking on the Senate floor, Sanders said Americans need a central bank that will help them with the problems they are facing of acquiring decent-paying jobs so that they can pay for heating this winter.
"We need a new Fed, we need a new Wall Street and we surely need a new chairman of the Fed, and my hope is that Mr. Obama will give us a new chairman of the Fed, and not Mr. Bernanke.," he said.
Sanders has threatened to try to use a procedural measure to prevent a vote by the full Senate on re-confirming Bernanke.
In his opening statement, Bernanke promised that if re-confirmed, he would work with Congress to overhaul the U.S. financial regulatory system to keep the United States on the road to economic recovery.
"It would be a tragedy if after all the hardships that Americans have endured during the past two years, our nation failed to take the steps necessary to prevent a recurrence of a crisis of the magnitude we have recently confronted," he said.
Democratic Senator Charles Schumer came to Bernanke's defense, asking the other senators to remember that the Fed Chairman took quick action to avoid total economic collapse.
"We have lots of problems, this economy is not moving well enough for my purposes, or I think anybody's here, but we are not in the Great Depression, which I think we might have been," he said.
Analysts say the Senate is likely to confirm Bernanke to a second term, despite the frustrations with continuing high unemployment expressed by many lawmakers.
