01.28.10

Statement On The Nomination Of Benjamin Bernanke As Chairman Of The Federal Reserve Board

Mr. President, I will vote for President Obama’s nomination of Benjamin Bernanke for a second term as Chairman of the Federal Reserve Board.   

Chairman Bernanke’s nomination should be examined through the prism of how he performed during the recent financial crisis, and with full consideration of the best interests of the American people and their stake in the Nation’s economic recovery.   

It is clear that prompt and decisive action by Federal officials like Dr. Bernanke saved the country from another Great Depression.  Since the economic meltdown in the fall of 2008, the Federal government has committed its resources to quell the financial turmoil and stabilize the economy.  The Federal Reserve, led by Chairman Bernanke, played a central role in these efforts.  They cut interest rates early and aggressively, reducing the target for the Federal funds rate to nearly zero.  They created targeted lending programs to restart the flow of credit in critical markets.  They worked with other agencies – like the Treasury Department, the FDIC, and overseas central banks – to ensure that financial institutions worldwide had access to short-term funding.   

I supported these efforts to respond to the financial crisis to prevent the country from sliding into an economic depression, which was a very real possibility just a few months ago.  Congress passed an economic rescue bill that staved off a full market retreat, and it enacted an economic recovery plan that is beginning to turn things around.  Through these efforts our economy has begun to show signs of progress in recent months.     

But much more is needed to jumpstart our economy, and the Federal Reserve needs to focus more on helping Main Street, not just Wall Street.  While I believe Chairman Bernanke acted wisely during the worst of the economic crisis, he now needs to concentrate his efforts on a broader economic recovery by helping small businesses gain access to affordable capital to expand their markets and create more jobs.  Small businesses are the backbone of Vermont’s and the Nation’s economy.  During his second term, Chairman Bernanke must direct the Federal Reserve to do more to support small business economic growth.   

And with the Federal Reserve playing such a large role in the recovery effort, the American people deserve greater transparency by knowing the full extent of the Fed’s lending programs, which is why I have cosponsored legislation introduced by Senator Sanders to provide for a full audit of the funds released by the Federal Reserve. 

The early stages of an economic recovery are fragile -- all the more during this recovery, as we inch back from a time, unprecedented in our lifetimes, when the United States and the world stood on the brink of financial collapse in the fall of 2008.  Economic decisions and markets and ultimately our economy itself are unsettled by uncertainty, and the intended or unintended effects that a sudden turnover at the Federal Reserve would have right now on the economic recovery should not and must not be underestimated. 

When considering who would best fill important positions like Chairman of the Federal Reserve, the President and the Senate must ensure that Federal agencies are led by qualified and competent officials.  Chairman Bernanke has helped to steer our financial and economic system through the worst financial storm in nearly a century.  With much work remaining, I support his nomination for another term.   

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