Bernanke Edges Closer to a Second Term

Embattled Federal Reserve Chairman Ben Bernanke edged closer to winning support for a second term after the Senate’s Republican leader predicted confirmation and Democrats aimed to have a vote this week.

Bernanke’s prospects appeared shaky last week when two Senate Democrats announced their opposition. Uncertainty on Bernanke’s confirmation rattled investors, contributing to the worst three-day slide for U.S. stocks in 10 months.

But a spokesman for Senate Majority Leader Harry Reid said on Sunday that the senator hoped to have a vote to confirm Bernanke this week. Bernanke’s term expires at the end of the month.

Top Senate Republican Mitch McConnell said he expected Bernanke to be approved. “He’s going to have bipartisan support in the Senate and I would anticipate he’d be confirmed,” McConnell told NBC’s “Meet the Press.” But McConnell would not say how he would vote.

Concerned about the surge of opposition to Bernanke’s renomination, President Barack Obama contacted the Democratic Senate leadership Saturday to make sure there were enough votes.{loadposition in-article-google-200}

“The president is very confident that the chairman will be confirmed,” White House senior adviser David Axelrod said on CNN’s “State of the Union” program Sunday. “The readings he’s getting from his conversations are that Chairman Bernanke will be confirmed.”

At least 29 senators have said they will back Bernanke or are leaning toward supporting him and at least 17 senators have either already voted against him in committee, come out against or said they are leaning against the central banker, according to a check by Reuters.

“I think he will survive. Markets would react very negatively if he is not confirmed,” said Peter Morici, professor of economics at University of Maryland.

Bernanke’s term ends Jan. 31.

Bernanke’s Critics

Bernanke’s critics say the Fed failed to prevent the recent financial crisis, the worst since the Great Depression, and fought the meltdown in a way that favored the financial industry at the expense of ordinary citizens.

With congressional elections in November, many lawmakers are unwilling to take any stand that appears to benefit Wall Street, particularly after Tuesday’s Republican upset in Massachusetts for the U.S. Senate seat that had been a Democratic stronghold for decades.

Some Republicans have imposed a procedural block on Bernanke’s confirmation, forcing Senate leaders to secure a super-majority of 60 votes in the 100-member chamber to advance the nomination.{loadposition in-article-cramer-small}

“I think we need a fresh start,” Republican Senator John Cornyn told “Fox News Sunday,” saying he would oppose Bernanke.

Senator John McCain, the Republican presidential candidate who lost to Obama in 2008, said on CBS’ “Face the Nation” program he was “both skeptical and leaning against” Bernanke’s confirmation.

But Republican Senator Orrin Hatch told CNN he would vote for Bernanke partly out of worry of the nominee the administration would choose in his place.

“There are some things I don’t agree with that have been done, but I think he basically has — has all of the ability to do it,” Hatch said. “I’d be terrified of having him replaced by this administration. You never know what you’re going to get.”

Traders are betting there is a 93 percent chance that Bernanke will win confirmation for a second term, online market InTrade said Sunday.

Bernanke, who was first named chairman by former Republican President George W. Bush, was nominated to a second term by Obama in August.

Axelrod on CNN defended Bernanke’s handling of the financial crisis. “We’re still in a fragile state here, even though the economy is growing, and we need his leadership,” Axelrod said.

“He has been a very steady hand in this crisis. He’s taken initiatives that have been important in terms of stabilizing the economy.”

The unemployment rate stands at 10 percent, with more than 15 million Americans out of work.

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