National

Jan 28, 2010 4:31 PM by Associated Press

Senate confirms Bernanke for second term

The Senate has confirmed Ben Bernanke for a second term as chairman of the Federal Reserve.

The Senate voted 70-30 on Thursday to reappoint Bernanke amid criticism of his judgment ahead of the financial crisis and his support for massive Wall Street bailouts. His supporters credited him for engineering a financial industry rescue in time to prevent a catastrophic collapse.

The vote was the closest ever for a nominee for Fed chairman. It came amid roiling public anger over the economy and stubbornly high unemployment that fueled a populist backlash against Bernanke. No Fed chairman has been rejected in the Senate.

Bernanke's current term expires Sunday.

Senate critics had arrayed themselves against Federal Reserve Chairman Ben Bernanke, determined to take issue with his bid for a second term leading the nation's central bank even as his confirmation seemed assured.

Bernanke needed a 60-vote super majority to beat a filibuster aimed at blocking his reappointment. He received enough votes.

"Bernanke fiddled while our markets burned," said Sen. Richard Shelby, R-Ala., voicing a common complaint that Bernanke did not detect the coming crisis and failed to rein in the banking industry.

His supporters argue that once the crisis was upon him he used aggressive and creative measures to bring stability to the financial system.

"He has kept a steady hand on the tiller in a perfect economic storm," Sen. Robert Menendez, D-N.J., said.

The final confirmation vote could still be the slimmest for a Federal Reserve nominee, eclipsing the opposition to Paul Volcker in 1983, when he was confirmed for a second term by a vote of 84-16. No Fed chairman nominee has been rejected by the Senate.

The stock market has been rooting for Bernanke. The Dow Jones industrial average plunged last week amid news of mounting opposition, then recovered when his prospects brightened.

The Federal Reserve wields enormous power over American pocketbooks. It has the power to set interest rates that influence economic activity, employment and inflation. And it helps maintain economic stability by making emergency loans to banks when they can't get cash elsewhere.

 

 

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