White House fights for Bernanke support in Senate
Published: Saturday, January 23, 2010 at 6:01 a.m.
Last Modified: Saturday, January 23, 2010 at 1:09 a.m.
WASHINGTON — Federal Reserve Chairman Ben Bernanke encountered new Senate opposition Friday for another four-year term as the White House worked aggressively to keep his support from eroding further.
President Barack Obama's chief of staff, Rahm Emanuel, and Treasury Secretary Timothy Geithner were on the phone throughout the day to key senators to shore up votes, said two senior administration officials, speaking on condition of anonymity to more freely discuss behind-the-scenes activity.
On Friday, three Democrats — Sens. Russ Feingold of Wisconsin, Barbara Boxer of California and Jeff Merkley of Oregon — announced they would vote against Bernanke's confirmation. A fourth Democrat — Sen. Byron Dorgan of North Dakota, announced his opposition Thursday.
And at least three senators who voted for Bernanke in the Senate Banking Committee last month were weighing their support.
Despite the Democratic defections, the administration's concerns about the status of the nomination were lessened somewhat by the knowledge that several Republicans were committed for Bernanke, one official said.
Sen. Judd Gregg, R-N.H., joined the White House Friday in expressing confidence that Bernanke would be confirmed.
"I'm fairly confident we will get a strong vote from Republicans — it may not be a majority vote but it will be a strong vote," said Gregg, a member of the Senate Banking Committee and former Budget Committee chairman.
No one was declaring Bernanke's confirmation doomed, but the emergence of opposition and the shift by some to undecided reflected public anger over Wall Street bailouts that Bernanke helped engineer. It also signaled discomfort with Obama's economic policies, particularly in the wake of Tuesday's surprise Republican Senate victory in Massachusetts.
In a boost for Bernanke, Senate Majority Leader Harry Reid of Nevada came out late Friday and endorsed him. Reid's previous silence about his position on the Fed chief stoked concerns about the nomination. "An expert on the Great Depression, Chairman Bernanke helped steer us away from a second one," Reid said. Still, he said Bernanke must "redouble" his efforts to help struggling Americans.
Merkley, who opposed Bernanke in committee, said Friday he was opposing Bernanke's nomination. He blamed Bernanke not only for missing signs of the smoldering crisis. "Ben Bernanke helped set the fire," Merkley said.
Added Boxer: "It is time for a change — it is time for Main Street to have a champion at the Fed," Boxer said.
White House deputy press secretary Bill Burton, talking to reporters as Obama headed to Ohio Friday, said the president has "a great deal of confidence" in the actions Bernanke already has taken and believes he's "the best person for the job."
Burton said the White House still believes that Bernanke, 56, will get enough votes in the Senate to run the nation's central bank for another four years.
Bernanke faces a 60-vote Senate hurdle because Sen. Bernie Sanders, an independent liberal from Vermont, has placed a "hold" on the nomination. That means it will require a super-majority to bring the nomination to a vote. The actual vote on confirmation would still be a simple majority.
The political waters have been getting rougher for Bernanke, and the Senate confirmation vote may be much tighter than many had anticipated just a month ago. Counting votes against him in committee, Bernanke has at least 10 senators publicly against him.
Bernanke has no real Senate constituency with either party because he was appointed to his first term by President George W. Bush but is now closely linked to Obama's economic policies. Obama was not expected to hold it against Democrats who oppose Bernanke on the floor.
A spokeswoman for Sens. Sherrod Brown, D-Ohio, who voted for Bernanke in committee, said he is now undecided. Sen. Robert Menendez, D-N.J., was in the same position after supporting him in committee, according to a Democratic aide who would speak only anonymously because the senator hasn't announced his position. And Sen. Bob Corker, R-Tenn., one of four Republicans to side with Bernanke in committee, said that while he wants to support him and is carefully examining Bernanke's record, "I do reserve the right to vote against him" — a view he expressed in committee last month.
Corker said a strong argument for Bernanke is that he is best equipped to mop up massive amounts of money pumped into the economy during the crisis to avert another dangerous problem: an outbreak of inflation.
"On the other hand, at some point you have to weigh that against the fact that regardless of what he's done, even if everything he's done has been perfect, you've got to understand that trust that the public has in the Fed today has been greatly diminished by the activities that have taken place over the last couple of years," Corker said in an interview.
A time for a vote still hasn't been set. Officials at one time had hoped that it would come this week. Bernanke's term expires on Jan. 31.
Don Stewart, spokesman for Senate Republican leader Mitch McConnell of Kentucky, said that Democrats had asked GOP leaders to measure support among Republicans. "We didn't think we'd even have to count," Stewart said.
If Bernanke is not confirmed before his term expires, Fed Vice Chairman Donald Kohn would probably step in as chairman and run the central bank on a temporary basis.
While praised for preventing the recession from turning into another depression, Bernanke's support of Wall Street bailouts — especially the $182 billion rescue of insurance giant American International Group Inc. — has touched a nerve on Main Street.
"The whole AIG issue — you'd have to be asleep not to know that that has certainly clouded the issue," Corker said.