Fed's Bernanke Faces Tighter Vote in Senate

By:  Damian Paletta and Sudeep Reddy
Wall Street Journal

Ben Bernanke's confirmation for a second term as Federal Reserve chairman will go down to the wire and could be a closer vote than seemed likely just a few weeks ago.

Mr. Bernanke's current term as Fed chairman expires at the end of the month, and a Senate confirmation vote has been pushed off until next week at the earliest. Mr. Bernanke met with Senate Majority Leader Harry Reid Thursday as Democratic and Republican leaders surveyed senators to tally votes on the nomination. Mr. Bernanke needs 60 supporters to win approval for another four-year term.

"A few Democrats have publicly said they won't vote for Mr. Bernanke's appointment, so you need Republican support," said Senate Majority Whip Richard Durbin (D., Ill.).

Two Democrats, Sens. Byron Dorgan of North Dakota and Jeff Merkley of Oregon, say they plan to vote against the nomination. Sen. Bernie Sanders, a Vermont independent who votes with Democrats, has led the charge from the left against Mr. Bernanke and also plans a "no" vote.

In an interview, Mr. Sanders said other Democratic senators—who haven't indicated their intent publicly—also planned to vote against the nomination to signal displeasure with the Fed's handling of the financial crisis and Wall Street.

"You're beginning to see, maybe this vote is kind of symbolic of one's attitude toward Wall Street, and whether or not we're going to stand up to them and move it in a new direction with new leadership, or whether we keep up the same old same old," Mr. Sanders said.

Mr. Reid was preparing to file for cloture on the nomination—a procedural move to block a potential filibuster—as early as this week, setting the stage for a full Senate vote. A Reid spokeswoman said the Senate was focused first on legislation to raise the federal debt ceiling, and still hopes to consider the Bernanke nomination by the end of the month.

Under Senate rules, a cloture vote, requiring 60 senators to limit debate on the nomination, would come two calendar days after cloture is filed. That vote, which could come as early as Monday, would be the key vote for Mr. Bernanke. A final vote, following up to 30 hours of debate, requires a simple majority.

Mr. Sanders and Republican Sens. Jim Bunning of Kentucky, Jim DeMint of South Carolina and David Vitter of Louisiana have vowed to block the Bernanke nomination.

Mr. Reid discussed bank lending, among other issues, with the Fed chairman Thursday. After the meeting in the senator's office, Mr. Reid issued a statement saying, "More pressure needs to be applied to banks to lend money to small businesses and keep more Americans in their homes."

If the full Senate votes in a similar proportion that the Senate Banking Committee did in its 16-7 approval last month, Mr. Bernanke would receive 69 votes—the fewest since Paul Volcker, who was confirmed 84-16 for a second term in 1983.

Mr. Sanders maintained he has a shot at getting enough Democrats to join a long list of Republicans who are expected to vote against Mr. Bernanke. "It's going to be close," he said.

Some senators spoke against Mr. Bernanke at a closed meeting of Democrats Wednesday. And a number of senators say they remain undecided. "I'm just compiling some information, some thoughts," said Sen. Ben Nelson (D., Neb.).

Mr. Bernanke was nominated for a second term as chairman by President Barack Obama in August and has a separate term as a Fed governor through 2020.

It's unclear whether he could remain as acting Fed chairman past Jan. 31 if the Senate vote is delayed beyond next week. Alan Greenspan did so in 1996 while awaiting Senate confirmation for another term as chairman. But the Fed at the time lacked a vice chairman, who under the law is to fill the role during a chairman's absence.