Federal Reserve Chairman Ben Bernanke's second term at the helm of the central bank expires on Sunday. The Senate is expected to vote late this week on his confirmation, but the timing is proving problematic for President Obama.
While Obama has endorsed his staying on, some Senate Democrats are balking. For many Democrats, it's not easy to embrace the man that former President Bush appointed to head the Federal Reserve. Late last week, more and more of them declared they would not vote for another term for Bernanke — and Senate Democratic leaders were pressed by an increasingly worried White House to back him.
But Majority Leader Harry Reid (D-NV) has come out with a written statement of support. And Sen. Richard Durbin (D-IL), the Senate's No. 2 Democrat, made a less-than-ringing endorsement of Bernanke Sunday on CBS' Face the Nation.
"I have some misgivings about Fed policy and economic policy," Durbin said. "But I really do have to say, this man guided us through the worst economic crisis this nation has seen since the Great Depression, and we are in much better shape today because of his guidance and leadership. I still have unanswered questions, and many colleagues do."
That apparent ambivalence toward Bernanke does not surprise Jack Pitney, a political scientist at Claremont McKenna College. He says that Obama put Senate Democrats in a tricky position, asking them to reconfirm a man seen as a strong ally of Wall Street even as the president is distancing himself from Wall Street.
"The president is simultaneously trying to appease Wall Street and demonize Wall Street. Politically, that's a very difficult trick to pull off," Pitney says. "And a lot of Democrats on Capitol Hill are caught in the crossfire."
At least four Senate Democrats say they'll oppose Bernanke. One of them, Oregon's Jeffrey Merkley, denounced the Fed chairman on the Senate floor. "He has been at the table of economic policymaking in this country for eight years, when mistake after mistake after mistake has been made," Merkley said. "That is how the house was set on fire. And now that it's burned to the ground, we don't need a fireman to rebuild the house; we need a carpenter."
And Sen. Byron Dorgan (D-ND) said Bernanke rebuffed him and eight other senators when they wrote the Fed chairman last summer. They had demanded to know which investment banks borrowed money, how much, and on what terms after the Fed opened a brand new loan window for those banks:
"And he wrote back to us and says, 'I don't intend to tell you that, don't intend to tell the Congress and don't intend to tell the American people.' Despite the fact that he said transparency is a big issue for him," Dorgan said. "Well, apparently not on this issue."
Several senators have holds on Bernanke's renomination, meaning at least 60 votes are needed to bring it up — but not all 60 in the Democratic caucus can be counted on. So some Republican votes will be required.
But Claremont McKenna's Pitney says Republicans can't be counted on, either.
"In a sense, it's a free vote for Republicans," Pitney says. "Bernanke was a Bush appointee, but Republicans don't have a whole lot of residual loyalty to President Bush."
Sen. John McCain (R-AZ) issued a statement Monday saying he will vote against reconfirming Bernanke.
"I'm very skeptical about his nomination," McCain said on Face the Nation. "I'm worried that if his nomination is turned down, the effect that it might have. But the fact is that Chairman Bernanke was in charge when we hit the iceberg and his policies were partially responsible for the meltdown that we experienced. I think that he should be held accountable."
As for Bernanke's support among other Senate Republicans, Florida's George LeMieux says, "I don't want to speak out of school, but I think it's mixed. I think there are some that support him and some that don't, and I think it'll ultimately be a close vote."
LeMieux has yet to say how he'll vote when the Senate takes up the nomination.
