Reid announces support for Bernanke

Senate Majority Leader Harry Reid (D-Nev.) said late on Friday that he
supports Ben Bernanke for a second term as Federal Reserve chairman.

The statement came after stock markets closed and amid a day of uncertainty about whether Bernanke had the necessary votes for confirmation. Reid himself had issued a vague statement on Thursday about whether he would support Bernanke.

“While I will vote for his confirmation, my support is not unconditional,” Reid said in a statement. “I know Chairman Bernanke is committed to transparency and accountability, and that is why I will hold him to the highest standards of both.”

{mosads}Most analysts believe Bernanke will win confirmation, but there are at least 13 definite votes in opposition. The stock markets took a plunge on Friday amid the uncertainty of Bernanke’s confirmation. His term is up on Jan. 31.

“I made it clear that to merit confirmation, Chairman Bernanke must redouble his efforts to ensure families can access the credit they need to buy or keep their home, send their children to college or start a small business,” Reid said. “He has assured me he will soon outline plans for making that happen, and I eagerly await them.”

Sixteen lawmakers in the Banking Committee backed Bernanke’s nomination and seven who voted no. Assuming those lawmakers do not change their positions, there are now 25 senators who back Bernanke and 13 who oppose him, according to a survey conducted on Friday by The Hill. Many offices declined to comment or indicated their boss was undecided.

Legislators who oppose Bernanke that do not sit on the Banking Committee include Sens. Jim Inhofe (R-Okla.), Jeff Sessions (R-Ala.), Russ Feingold (D-Wis.), Bernard Sanders (I-Vt.), Byron Dorgan (D-N.D.) and Barbara Boxer (D-Calif.).

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Lawmakers not on the Banking panel who back Bernanke include Sens. Reid, Lamar Alexander (R-Tenn.), Richard Burr (R-N.C.), Richard Lugar (R-Ind.), Susan Collins (R-Maine), Mary Landrieu (D-La.), Jeff Bingaman (D-N.M.), Tom Carper (D-Del.) and Max Baucus (D-Mont.).

A few lawmakers, including Sen. Sherrod Brown (D-Ohio), may vote differently on Bernanke’s nomination when it hits the floor. Brown voted for Bernanke in committee.

Wall Street is very anxious about Bernanke’s nomination. In a memo issued Friday afternoon titled, “Is it time to hit the panic button?”, Mike Feroli of J.P. Morgan Research wrote, “A ‘no’ vote on Bernanke would rightly be read as a politicization of monetary policy, which has been without fail associated with poor economic outcomes: uncertaintly would ramp up, inflation risk premium would increase, the cost of capital would rise accordingly, and the real economy and labor markets would suffer. In short, it would be an economic policy mistake of colossal proportions.”

Matthew Coleman and Anthony C. Lange contributed this article, which was updated at 6:25 p.m.