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Bernanke confirmation runs into resistance in Senate

Some key lawmakers in the Senate are saying they will vote against the Bernanke confirmation. The Fed chairman’s term expires at the end of this month.

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In a statement, Senator Boxer said she had a lot of respect for the Fed chairman. But, she added, “it is time for a change – it is time for Main Street to have a champion at the Fed.”

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They join two other Democrats and Sen. Bernard Sanders of Vermont, an independent, in opposing Bernanke’s confirmation. Some are against Bernanke since he supported the giant investment banks, including Goldman Sachs. One of the Democrats is Sen. Byron Dorgan of North Dakota, who said Thursday he would vote against Bernanke because the Fed has refused to release the names of the investment banks that borrowed money from the central bank during the worst of the financial meltdown.

In addition, the vote on the nomination is currently on hold because two Republicans – Sens. Jim DeMint of South Carolina and David Vitter of Louisiana – want the Senate to first vote on a bill to require an audit of the Fed. Senator Sanders has also put a hold on the nomination.

On Friday, however, Senate majority leader Harry Reid issued a statement saying that he would vote for Bernanke. But his support is not unconditional, he added.

To avoid a filibuster, Bernanke’s nomination will need 60 votes.

To some observers, the anti-Bernanke votes are indications that some politicians are worried about their seats in the wake of the Scott Brown victory in Massachusetts.

“There is an anti-incumbent mentality echoing through Main Street and now through the corridors of Washington,” Mr. Kleintop says. “Now the senators are worried about that sentiment and if it means they will still be around after November.”

For its part, the Obama administration continues to support the nomination of Bernanke, a Republican. President Obama has “a great deal of confidence in what Chairman Bernanke did to bring our economy back from the brink,” deputy press secretary Bill Burton said Friday.

If the administration is unable to get the votes for Bernanke, Mr. Gramley expects that the Fed chairman would resign and Donald Kohn, currently the vice chairman, would temporarily take the reins.

Uncertainty over who would replace Bernanke would not be good for the markets, says Douglas Roberts at Channel Capital Research in Shrewsbury, N.J. “How long it dragged out could be an issue,” he says. “The key thing is the uncertainty.”

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