If you believe polls, current Federal Reserve Chairman Ben Bernanke favorability has been slipping. A recent Rasmussen Reports poll indicates that only 21 percent of Americans [1] favor his reappointment as the Fed chair.
And this hasn’t gone unnoticed by some members of the Senate, where Bernanke’s fate lies. Bernanke’s reconfirmation passed through the Senate Banking Committee by a 16-to-7 vote on Dec. 17. But that margin calls into question how his reconfirmation vote on the Senate floor could go. And as CNBC “The Kudlow Report” host Larry Kudlow warned, that puts his reconfirmation in question.
“Look, ‘Helicopter’ Ben passed the Senate Banking Committee vote on his reconfirmation,” Kudlow said on his Dec. 17 program. “He got 16-to-7, but he lost seven votes. I think all the Republicans except Sen. Bob Corker voted against Bernanke, and they were joined by one Democrat, Sen. Jeff Merkley of
According to Kudlow, if it appears Bernanke will have more than 35 votes coming against him, the Fed chairman should consider withdrawing his name from consideration for another term.
“If Mr. Bernanke were to be opposed by as many as let’s say, 35 votes, it would substantially undermine his credibility to operate as a Fed chairman,” Kudlow continued. “Bernanke's term, of course, extends to the end of January, but I wonder if he realizes just how much opposition he may have. And unless he thinks he can garner a truly bipartisan vote in the weeks ahead, then I begin to think he should consider withdrawing his name. That's how difficult the stakes may be for Mr. Ben Bernanke.”
At the end of his program, Kudlow explained he wasn’t calling for Bernanke to withdraw outright, but said certain criteria must be met in his reconfirmation.
“I want to briefly go back to my point about Ben Bernanke – must have a true bipartisan reconfirmation vote,” Kudlow said. “I’m not saying tonight that he should withdraw, but if he’s going to lose 30-35 votes on the floor of the Senate, I don’t believe he can govern as Fed chairman. That has never happened before in history.”
And Kudlow is right as far as recent history is concerned. Sudeep Reddy for the Dec. 16 Wall Street Journal [2] compiled the previous Federal Reserve conformation votes and not even a very unpopular Paul Volcker that presided over the Fed during a tough economy failed to get less than 80 votes. Here are Reddy’s numbers:
1979 Paul Volcker 98-0
1983 Volcker 84-16
1987 Alan Greenspan 91-2
1992 Greenspan unanimous consent
1996 Greenspan 91-7
2000 Greenspan 89-4
2004 Greenspan voice vote
2006 Ben Bernanke voice vote
2010 Bernanke ?
Kudlow suggested Bernanke canvass senators and reaffirm their confidence because otherwise, he would be deemed ineffective as a Fed leader and that could come at the expense of the country.
“Whether it’s his past monetary performance, or the bailouts, or the issue of AIG, or the end to secrecy and better disclosure at the Fed from GAO audits, Mr. Bernanke must re-canvass senators across the board, Republicans and Democrats,” Kudlow continued. “He cannot survive and govern effectively if 30 or 35 senators vote against him. If that happens, he ought to withdraw and take the whole country off the hook. So I say to you, Mr. Bernanke, do your homework. You’re going to have to start some shoe leather and you’re going to have to visit some senators and make your peace if you expect to survive.”