As White House, Federal Reserve and Treasury Department staff prepare Janet Yellen to face the U.S. Senate for her nomination as the next Federal Reserve chairman, one experience remains seared in their memories: Ben S. Bernanke's close call in 2010.
In the final days before the confirmation vote, aides concluded there was a real risk that Bernanke's renomination would fail. Voter anger and lawmaker distrust stirred by the Fed's role in bailing out Wall Street banks less than two years earlier combined to nearly sink his bid, which required a last-minute rescue operation that involved the president himself.
That episode helped shape the strategy now guiding the team managing Yellen's nomination, which has adopted the playbook once reserved for contentious Supreme Court or top-level Cabinet posts, according to a dozen people involved in one or both efforts. No longer seen as a technocrat or oracle, the job of Fed chairman has been pulled into the fray of Washington's polarized politics.
The media and lawmakers are also gearing up for a Supreme Court-style confirmation fight. Television cameras greet Yellen, 67, at the door to each Senate office she visits. Behind the scenes, aides prepared to grill her at practice sessions called "murder boards" to steel her for hostile questions during a confirmation hearing set for this Thursday.
Senators of both parties are predicting Yellen will have an easier path than Bernanke. Still, officials say the days of Fed governors being approved by wide margins are over, and confirmation can't be taken for granted. They cite the case of Peter Diamond, a Nobel laureate nominated by President Barack Obama to the Fed board three times who was blocked by Senate Republicans. And Obama's former top economic adviser, Lawrence Summers, withdrew his name from consideration for the Fed chairman post after Democratic opponents rallied early against him, seeing him as too close to Wall Street.
Spokesmen for the Fed, White House, Banking committee and Treasury Department either declined to comment or didn't respond to a request for comment.
The Obama administration, people involved in the nomination fight said, was caught unaware of the depth of its own party's ambivalence about Bernanke, 59, who had served as a member of Bush's economic team and was first nominated to the Fed by the Republican president. That process followed the traditional pattern of the Senate deferring to the president's choice, and was so non-controversial that the chamber confirmed him by simple voice vote.
Bernanke's second nomination, coming while the country was still struggling to recover from the 2008 crisis, quickly ran into trouble. One of the lowest points came when staff members learned that Richard Durbin, the No. 2 Democrat and senator from Obama's home state of Illinois, was taking part in a growing opposition among liberal senators. It took a personal call to Durbin by Obama to change his mind, according to participants in the effort, who spoke on condition of anonymity to discuss details not previously made public.
Bernanke's hearing before the Senate Banking committee in December 2009 was so tempestuous that the Obama administration and allies on Capitol Hill pushed the vote into January to gain time to counter the opposition.
© 1998 - 2013 Baystreet.ca Media Corp. All rights reserved.
Original headline: White House learns from Bernanke close call
Most Popular Stories
- Small-Business Loans Fueling Economic Growth
- Tesco Head Steps Down After Profit Warning
- Want a Job? Try Minneapolis
- Comic-Con Offers Toy Designers a Chance to Go Wild
- Google Chrome Bug Draining Batteries: Report
- Gasoline Costs Drive Consumer Price Increases
- Russians Fed Steady Diet of Conspiracy Theories
- BlackBerry Appoints New COO from LiveOps Inc.
- Startup Makes It Easier to Buy American
- Clinton Wants U.S., E.U. to Get Tough on Russia