By Ian Swanson - 08/24/09 09:54 PM EDT
Federal Reserve Chairman Ben Bernanke will be nominated to a second term by President Barack Obama on Tuesday, according to media reports.
Bernanke lobbied Congress to approve a $700 billion bailout of the nation’s banks and has lowered interest rates to nearly zero percent. He also has launched an array of new programs at the Fed intended to increase the flow of credit.
In recent weeks, Bernanke has told the country that the economy is “leveling out,” even as he has warned the recovery will be a long one. Bernanke has signaled the Fed will eventually unwind some of its involvement in the economy, but has suggested interest rates will remain low for some time.
While the nomination is not a surprise, Bernanke also has come under some criticism from members of Congress, and there had been some speculation that Larry Summers, the president's chief economic adviser, might be nominated to the post.
In a statement that criticized the chairman for being too slow to react to the crisis, Senate Banking Committee Chairman Chris Dodd (D-Conn.) said he thought Bernanke's reappointment was "probably" the right choice.
"While I have had serious differences with the Federal Reserve over the past few years, I think reappointing Chairman Bernanke is probably the right choice," Dodd said. "Chairman Bernanke was too slow to act during the early stages of the foreclosure crisis, but he ultimately demonstrated effective leadership and his reappointment sends the right signal to the markets.
"There will be a thorough and comprehensive confirmation hearing," Dodd continued. "I still have serious concerns about the Federal Reserve’s failure to protect consumers and I strongly believe these responsibilities should go to an independent consumer financial protection agency. I expect many serious questions will be raised about the role of the Federal Reserve moving forward and what authorities it should and should not have."
Lawmakers have questioned the Fed’s transparency as it has pumped additional trillions into the economy. Bernanke also came under scrutiny for his involvement in encouraging Bank of America to purchase Merrill Lynch at the height of the crisis last year.
Just more than a month ago, lawmakers from both parties interviewed by The Hill were reluctant to endorse Bernanke for a second term.
“I don’t know yet,” Dodd said at the time. “That’s a decision the president gets to make.”
Bernanke was first nominated as chairman of the Federal Reserve by former President George W. Bush, and he was confirmed by a Senate voice vote in 2006.
Bernanke has engaged in a media campaign to raise his profile, even taking the step of sitting down for an in-depth interview on “60 Minutes.”
Obama has repeatedly said he is confident in Bernanke’s leadership. The chairman’s four-year term ends in January.
The White House announced Monday night that Obama would make a statement to the media Tuesday morning from his vacation spot in Martha’s Vineyard.
The New York Times reported that Bernanke will appear with Obama.
“The president thinks that Ben's done a great job as Fed chairman, that he has helped the economy through one of the worst experiences since the Great Depression and that he has essentially been pulling the economy back from the brink of what would have been the second Great Depression,” an administration official said on Monday night, according to the Times.
This story was updated at 10:28 p.m. and 7:12 a.m. on Tuesday.