The Senate Banking Committee has voted to approve the nomination of Federal Reserve Chairman Ben Bernanke for a second term as head of the U.S. central bank. The move paves the way for a vote by the full Senate in January. But the committee approval came after two hours of contentious debate, and the committee's ranking Republican was among those voting against Bernanke.
Federal Reserve Chairman Ben Bernanke has cleared a major hurdle in his bid to win a second four-year term. But Thursday's Senate Banking Committee executive meeting turned out to be a roller-coast ride for Bernanke, who was not present, but was subjected to alternating sessions of praise and stinging criticism.
The top-ranking Republican on the committee, Senator Richard Shelby of Alabama, said he would vote against Bernanke, saying the 2008 financial crisis was years in the making, and that Bernanke bears part of the responsibility because he was a member of the Federal Reserve at that time.
"I strongly disapprove of some of the past deeds of the Federal Reserve while Ben Bernanke was a member and its chairman, and I lack confidence in what little planning for the future he has articulated," he said.
Republican Senator Jim Bunning of Kentucky mocked Bernanke's naming on Wednesday by Time Magazine as "Person of the Year". The magazine credited Bernanke with saving the United States from a second Great Depression.
"One financial blogger wrote yesterday that this was like rewarding the captain of the Titanic for getting everyone off the sinking ship after he rammed it into the iceberg," said Bunning.
The only Democrat to vote against Bernanke, Senator Jeff Merkley of Oregon, also blamed Bernanke for failing to recognize the dangers of the housing bubble and other signs of trouble.
"Dr. Bernanke's approach helped set our economic house on fire," he said. "That fire has destroyed the jobs, the health care, the retirement savings of millions of Americans and working families. Since then, Dr. Bernanke has shown himself to be quite adroit with the fire-hose."
Banking Committee Chairman, Democratic Senator Christopher Dodd, gave Bernanke credit for stepping up and taking quick and decisive action to pull the United States back from the brink of economic collapse.
"The Federal Reserve took extraordinary actions to arrest this crisis and prevent utter economic catastrophe," he said. "And I believe nothing short of that was at risk in the absence of those actions."
Republican Senator Bob Corker conceded that Bernanke has made mistakes, but said he has learned from them.
"Do I think that there is anybody, anybody in this country that has been tested more, and has the ability to be Chairman of the Fed right now than Chairman Bernanke, I don't think so," he said.
Committee Chairman Dodd rejected attempts by several Republican senators to delay the banking committee's vote on the nomination until early next year. Dodd said the panel needed to vote because Bernanke's first term expires January 31, and the committee has to clear the nomination before Senate Majority Leader Harry Reid can bring the issue to the full Senate for consideration when senators return in January after a planned holiday recess. Analysts say Bernanke is likely to win Senate confirmation, but the whole process may be another rough ride.