In essence, worry about the nation’s economic future trumps anger about actions the Fed may have taken – or not taken – in the past, said some Bernanke supporters in Senate debate prior to an expected Thursday vote on his reappointment.
Failing to reconfirm Mr. Bernanke “might be temporarily satisfying to some, but it wouldn’t help a single business add jobs, or a single family stay in their homes,” said Sen. Charles Schumer (D) of New York, a Senate Finance Committee member, during debate.
Bernanke has been widely credited with helping the world avoid a financial catastrophe last fall. He made the Fed the lender of last resort for US banks and other financial institutions, and did so quickly and with great creativity, according to his Senate proponents.
“He allowed the Fed to become the lender of the nation. Nobody had ever done that.... He deserves credit for having been willing and courageous enough to have made these types of decisions,” said Sen. Judd Gregg (R) of New Hampshire on Thursday.
But Bernanke has also angered many lawmakers and taxpayers with his support of bailouts for Wall Street. In particular, his actions in regard to the $182 billion rescue of insurance giant American International Group have come under intense scrutiny in Congress.
“The full story of AIG has yet to be told,” said Sen. Richard Shelby (R) of Alabama, ranking minority member on the Senate Banking Committee. Senator Shelby vowed to vote against Bernanke, saying that the Fed’s actions in helping to feed the housing bubble led to the economic melt-down in the first place.
“I believe it is far more important to consider the facts surrounding Chairman Bernanke’s record than it is to speculate about the impact of his departure,” said Shelby.
In the recent past, Fed chairmen have been confirmed for second terms with little controversy. No Fed chairman has ever been rejected by the Senate. But Bernanke has become something of a symbol for the unpopularity of the bank bailouts, and his reconfirmation has been in doubt.
But Senate majority leader Harry Reid appears to have rounded up the 60 votes he needs. In a rare example of bipartisanship, a significant number of those votes are probably Republican.
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