Politics

Ben Bernanke faces opposition in Senate ahead of term expiration on January 31

Senate Majority Leader Harry Reid of Nevada postponed a vote on Ben Bernanke’s reconfirmation as chairman of the Federal Reserve originally planned for Friday as both Republican and Democratic lawmakers issued statements of concern about his role in the financial crisis.

It is unclear whether the Senate has the required 60 votes to confirm him before his term expires on Jan. 31, though President Obama has expressed confidence Bernanke will continue in his position. The vote has yet to be rescheduled.

Sens. Bernie Sanders (I-Vt.), Jim Bunning (R-Ky.), Jim DeMint (R-S.C.) and David Vitter (R-La.) put holds on Bernanke’s nomination. More recently, Sen. Russ Feingold (D-Wis.),  Sen. Barbara Boxer (D-Ca.), and Sen. Byron Dorgan (D-N.D.) expressed opposition to Bernanke’s reconfirmation. Senator Bob Corker (R-Tenn.) supported the nomination in Committee, but since reviewing the documents provided by the Fed announced today he is undecided. The WSJ compiled a list of the votes as of today here.

Senate Minority Leader Mitch McConnell’s office is taking an internal count of the votes, but there’s no indication whether it is whipping the Republicans for or against Bernanke.

Following President Obama’s announcement on Thursday regarding regulation of banks deemed “too big to fail,” Capitol Hill is watching Bernanke for signs of that he agrees or disagrees with the president’s proposal.

“Sen. Vitter’s opposition to Bernanke’s nomination is not to make him a political straw man for the economy,” said Joel DiGrado, Sen. David Vitter’s spokesman. “He believes that Mr. Bernanke’s nomination debate provides an opportunity to bring more sunshine to the Federal Reserve in hopes to reforming its role and getting it back to focusing what it was created to do —  monetary policy.”

Member of the Senate Banking committee in December investigated documents held at the Federal Reserve which detail its dealings with institutions receiving bailout funds in the last two years. Specifically, there is concern about repayments AIG made after it was bailed out to investment banks it had insured. The documents have not been made publicly available and committee member Bunning has pushed for all senators to see them before a final vote is taken.

So far, only Bunning’s office has proposed an alternative name for consideration for the chairmanship: former economic adviser to the president and Stanford economist John B. Taylor, who specializes in monetary policy and wrote the Taylor Rule.

For an illustrated version of how the Fed works, click on the slide show to view a sample of the Fed’s own educational comic books, courtesy of the NY Fed.