Senate Panel Backs Fed Chief Nominee

The Senate Banking Committee on Wednesday approved the nomination of Ben S. Bernanke to be chairman of the Federal Reserve, sending it to the full Senate for a final confirming vote.

The panel backed Bernanke, chairman of the White House Council of Economic Advisors, on a voice vote, with one committee member in opposition.

“Ben Bernanke has the potential to follow in the footsteps of the giants like Paul Volcker and Alan Greenspan,” said Sen. Charles Schumer (D-N.Y.), referring to a former Fed chief and the current one. “The near-unanimous vote in the committee shows the broad bipartisan support he has.”

The nomination faces a vote in the full Senate, which must grant its approval for Bernanke to take over as chairman after Greenspan departs from the Fed on Jan. 31. The onetime academic is expected to win confirmation easily, but Senate aides have said a final vote may not come until next year.

Sen. Jim Bunning (R-Ky.), a longtime critic of the Fed under Greenspan, was the only panel member to oppose Bernanke, who had served on the central bank’s board for

nearly three years before taking the White House job in June.

Bunning said he was concerned the nominee, who always voted with Greenspan, had failed to establish his independence.

Bernanke, 51, is one of the nation’s preeminent monetary economists and a staunch advocate of greater central bank transparency.

At a hearing on his nomination Tuesday, Bernanke told the banking committee that “continuity” with the Greenspan Fed would be his top priority.

He made clear, however, that he still thought the U.S. central bank should lay out a numerical objective for acceptable inflation, arguing this would make it easier to keep inflation contained. Bernanke stressed that his belief in improving transparency by stating a numerical inflation goal did not mean he would lack flexibility.