- The Washington Times - Thursday, January 28, 2010

The Senate on Thursday afternoon handed Federal Reserve chairman Ben S. Bernanke a second term after a week of contentious debate.

In a 70-30 vote, the Senate voted to give the Fed chairman, originally nominated by former President George W. Bush, another four-year term at the helm of the world’s most powerful central bank. In overwhelmingly approving his renomination by President Obama, the Senate rejected arguments by senators on the left and right that Mr. Bernanke made fatal mistakes that led to the global financial crisis and Great Recession of the past two years.

The vote comes amid news that the economy weakened at the end of last year after posting robust growth during the summer and fall, when government stimulus measures promoting auto and home sales drove a pick-up in economic activity. Bernanke supporters warned that, with the economy in a still-fragile state, now was not the time to force radical change on the Fed, which is the agency on the front lines fighting the recession.

Senate Banking Committee chairman Christopher Dodd, Connecticut Democrat, warned colleagues that ousting Mr. Bernanke would be “dangerous” and would provoke a sharp reaction in financial markets. The stock market skidded by 5 percent last week, partly in reaction to signs that Mr. Bernanke’s nomination was running into trouble in the Senate.

Despite the Senate approval of Mr. Bernanke, stocks continued to decline Thursday amid troubling signs of setbacks in the job market and technology sector, as well as a credit rating downgrade of the entire British banking sector. The Dow Jones Industrial Average was down by 125 points at 10,111 in mid-afternoon trading just before the Bernanke vote, but improved some afterwards to end down 88 points at 10,147.

Earlier in the day, Mr. Bernanke’s nomination easily cleared a key procedural vote by 77 to 23, far more than the 60 votes needed to overcome a Senate filibuster, reflecting the willingness of the chairman’s Democratic opponents to allow a vote rather than seek to block the nomination. Sen. Barbara Boxer and several other Democratic senators said that while they planned to vote against Mr. Bernanke, they were willing to shut off debate and not take the risk of riling markets by stalling the nomination.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide