TARP Support Figures in Bernanke’s Fate

By Lindsey Ellerson

Jan 22, 2010 12:37pm

ABC News' Z. Byron Wolf reports: Only five Democrats have publicly said they will oppose the newly in-jeopardy re-nomination of Fed Chairman Ben Bernanke. But word late this morning that Sen. Barbara Boxer is among them must be particularly troubling for Bernanke supporters. Boxer is the first Democrat to oppose Bernanke who voted in favor of the Wall Street bailout – TARP – which he engineered late in 2008. The other four were among the ten Democratic caucus members who voted against the TARP program that Bernanke helped sell to Congress in 2008. Merkley opposed TARP on the campaign trail – as did most of the Democrats first elected to the Senate in 2008. The opposition of those newer Democrats to the TARP program on the campaign trail could become instrumental in Bernanke’s re-nomination fight; those leading the charge against him in both parties were the most vocal TARP opponents. Sen. Bernie Sanders, the Vermont Independent, is Bernanke’s chief antagonist in the Senate and was also the most vocal TARP opponent among the Democratic caucus. Democratic Sens. Byron Dorgan of North Dakota and Jeff Merkley of Oregon have also indicated they will vote against him. Merkley was the lone Democrat on the Senate Banking Committee to oppose Bernanke’s nomination when the panel voted in December. Sens. Russ Feingold and Barbara Boxer made their announcements this morning. “Under the watch of Ben Bernanke, the Federal Reserve permitted grossly irresponsible financial activities that led to the worst financial crisis since the Great Depression,” said Feingold in a written statement. “And as it responds to the crisis it helped to usher in, the Federal Reserve under Chairman Bernanke’s leadership continues to resist appropriate efforts to review that response, how taxpayers’ money was being used, and whether it acted appropriately." Boxer was less critical, saying in her written statement that she respects Bernanke personally and supported his actions to avert financial crisis in 2008. But she said it is time for a new face at the Fed. “It is time for Main Street to have a champion at the Fed. Dr. Bernanke played a lead role in crafting the Bush administration’s economic policies, which led to the current economic crisis,” she said. Senate Majority Leader Harry Reid met with Bernanke Thursday and was less than supportive afterwards. Reid issued a statement saying he hopes Bernanke can offer assurances that the Fed will do more to force banks to lend money to small businesses and keep people struggling with their mortgages in their homes. Three Republicans – Sens. Bob Corker of Tennessee, Bob Bennett of Utah and Judd Gregg of New Hampshire – who supported TARP when it passed in 2008, voted in favor of Bernanke when the Senate Banking Committee sent his re-nomination to the full Senate in December. They were joined in the by Republican Sen. Mike Johanns of Nebraska, who was elected in 2008. Every Republican and 13 Democrats – a majority 53 votes – supported ending the TARP program as part of an bill to raise the US debt ceiling by $1.9 trillion. The amendment needed 60 votes to pass. Depending on whether Bernanke’s vote takes place before or after Massachusetts Senator-elect Scott Brown is seated, he would currently need five or six Republicans to break a promised filibuster and vote for him if no other Democrats came out in opposition. But with opposition mounting, more Democrats are likely to voice their opposition in the coming days, further imperiling Bernanke’s second term.

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