Senator Bernie Sanders has announced he will put a hold on the Bernanke nomination. Sanders wants the Finance Committee to hold serious hearings probing Bernanke’s actions leading up to the financial collapse, and the emergency measures he took, committing literally trillions to bolster private financial institutions without a vote of Congress. Other Senators should be encouraged to join Sanders in demanding a full investigation before consideration of the Bernanke nomination.
Senator Moves to Hold Up Bernanke Confirmation
By EDMUND L. ANDREWS
WASHINGTON — Senator Bernard Sanders of Vermont said on Wednesday that he would try to block the Senate from confirming Ben S. Bernanke to a second term as chairman of the Federal Reserve.
The move is unlikely to derail Mr. Bernanke’s reappointment, but it could slow the confirmation process and give the Fed’s critics additional opportunity to press their case. As a practical matter, it means Senate Democratic leaders will have to line up 60 votes in favor of Mr. Bernanke rather than a simple majority at a time when the Federal Reserve is under increasing populist attacks from lawmakers on both the right and the left.
Mr. Bernanke will testify on Thursday at his confirmation hearing before the Senate banking committee. He is expected to face criticism for not doing more to prevent the financial crisis, and calls by some lawmakers for a sharply reduced regulatory role in the future.
Mr. Sanders, an independent, is not a member of the Senate banking committee, but he has frequently accused the Federal Reserve of bailing out Wall Street firms and the banking industry at the expense of ordinary citizens.
“In this country, there is profound disgust at what happened on Wall Street,” Mr. Sanders said in a telephone interview. “People want a new direction and people are asking, where was the Fed? How did the Fed allow this to happen, when one of their mandates to oversee the safety and soundness of the banking system?”
Mr. Sanders said he would place a hold on Mr. Bernanke’s nomination when it reached the Senate floor. Under Senate rules, lawmakers would need to amass 60 votes to override Mr. Sanders and proceed with a vote on the nomination.
Though the Senate has been paralyzed by similar blocking tactics on countless other issues, Mr. Bernanke probably has enough support in both parties to clear the 60-vote hurdle.
The Fed chairman was originally appointed by President George W. Bush and took over the central bank in February 2006. Despite his Republican ties, Mr. Bernanke forged a close working relationship with President Obama and his top economic advisers during the financial crisis.
Mr. Bernanke’s four-year term as Fed chairman ends on Jan. 31, 2010. If he were not reconfirmed by then, he could continue to serve in an acting role until he was confirmed or someone else was confirmed to succeed him. His supporters include much of the Senate’s Democratic leadership, though some senior Democrats have been more grudging than others.
Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee, has said Mr. Bernanke was “probably” the best person to lead the Fed because he responded valiantly to the financial crisis when it began two years ago.
But Mr. Dodd has also proposed stripping the Federal Reserve of virtually all its powers as a banking regulator, and consolidating all the federal government’s bank regulatory efforts in a new agency. In an Op-Ed article last Sunday in The Washington Post, Mr. Bernanke sharply criticized Mr. Dodd’s proposal.
Senator Richard C. Shelby of Alabama, the top Republican on the Senate banking committee, has also been sharply critical of the Federal Reserve but has not yet said how he will vote on Mr. Bernanke’s nomination.
Mr. Sanders, one of the Senate’s most left-leaning lawmakers, had already said he would vote against Mr. Bernanke’s appointment. He has also sponsored a bill that would allow Congress to “audit” all of the Federal Reserve’s activities, including its core mission of steering the economy by setting interest rates.
Mr. Sanders’s bill is identical to one championed by Representative Ron Paul, Republican of Texas, which Mr. Bernanke and other top Fed officials have adamantly opposed on the grounds that it would undermine the central bank’s political independence.
But in a surprising setback to the Fed, the House Financial Services Committee voted last month to approve Mr. Paul’s bill as an amendment to a broader bill aimed at overhauling financial regulation.