WASHINGTON – Republican Senator John McCain said on Monday he will vote against the nomination of Ben Bernanke to serve another term as chairman of the U.S. Federal Reserve.
In a statement, McCain said he appreciated Bernanke's service but "I believe that he must be held accountable for many of the decisions that contributed to our financial meltdown."
"Therefore, I plan to oppose Chairman Ben Bernanke's confirmation for a new term as Federal Reserve chairman," he said.
McCain, who is up for re-election this year in his home state of Arizona, had been leaning against Bernanke, who is facing a tight Senate vote on his confirmation but seems likely to be approved.
A Reuters poll showed 38 senators were either committed to approving the nomination or leaning that way, while 17 were outright opposed or inclined that way. Senate leaders need to secure a super-majority of 60 votes in the 100-member chamber to overcome efforts by some senators to block the nomination.
Senator Richard Durbin, the assistant Democratic leader, said he thought that with some Republican support, there would be enough votes to consider and approve Bernanke's nomination.
"He is battle-tested and I think that we need his steady hand and his good mind to bring us forward out of this recession to a growing economy," Durbin said after meeting with Bernanke on Monday.
What had looked like a sure thing was thrown into doubt last week when a growing number of senators said they would not support Bernanke, citing his handling of Wall Street bailouts.
"He has my strongest support," President Barack Obama said in an interview with ABC News. "What we need is somebody at the Federal Reserve who can make sure that the progress that we've made in stabilizing the economy continues."
While several senators said on Monday they would back the nomination, Durbin said votes were still being counted and some well-respected lawmakers, including Republican Senator John McCain, said they would stand in opposition.
Bernanke "must be held accountable for many of the decisions that contributed to our financial meltdown," said McCain, the Republican Party's presidential candidate in 2008.
Bernanke's first four-year term as chairman expires on Sunday. If he is not confirmed, the Fed's vice chairman, Donald Kohn, is poised to take over on an acting basis.
The timing of a vote remained uncertain on Monday, and it looked increasingly likely the earliest a vote would be held would be on Thursday.
The Fed has become a prime target of public outrage as the U.S. unemployment rate has remained stubbornly at 10 percent while Wall Street profits -- and bonuses -- have soared. Many voters saw the banks' results as evidence of an economic policy that favored Wall Street over Main Street.
That anger was on full display last week when voters handed Democrats an embarrassing defeat in a special Senate election in Massachusetts, which had been a Democratic stronghold for decades. That left Democrats one vote short of the 60 needed to clear Republican legislative roadblocks.
It also prompted some senators, mindful of their own November elections, to think twice about backing Bernanke.
Chris Krueger, a policy analyst with Concept Capital in Washington, said the White House "appears to have applied a sufficient tourniquet to Bernanke's reconfirmation." Krueger now sees a 70 percent chance that Bernanke will win confirmation, up from 55 percent on Friday.
That the vote was even in doubt was surprising, and the uncertainty sent stock markets down sharply on Friday, although they recovered somewhat on Monday as Bernanke's approval appeared more certain.
"This was not akin to squeezing 60 votes for health care or getting a controversial judge through a confirmation. This was reconfirming Time's 'Man of the Year,' which was a slam dunk before last Tuesday," Krueger said.
OBAMA ALLY OPPOSES NOMINATION
Bernanke, a Republican who was appointed by former President George W. Bush to succeed Alan Greenspan as Fed chairman in 2006, has received widespread praise for his response to the financial upheaval, which began with failing U.S. mortgage loans but rapidly expanded into a global crisis.
But Bernanke has also been blamed for missing the warning signs of a dangerous bubble forming in the housing market and underestimating its power to wreak havoc on the economy.
MoveOn.org, a Democratic political advocacy group and a strong supporter of Obama's 2008 presidential election, urged its members to tell their senators to vote against Bernanke.
"Bernanke presided over the biggest Wall Street bailout in history, making trillions of dollars in loans to big banks with no oversight," the group said. "But after taking extreme measures to save the banks, Bernanke has shown no interest in helping regular folks who can't find jobs, even though ensuring 'full employment' is explicitly part of his mandate."
On the other hand, many investors see Bernanke as a known entity who is committed to keeping short-term interest rates low until the economy strengthens. They see the reappointment fight as a worrisome sign of politics interfering with monetary policy.
The backlash over the financial crisis and ensuing government bailouts has put the U.S. central bank under intense political scrutiny.
The House of Representatives last month approved a measure that would give Congress authority to audit the Fed's interest rate decisions, the very heart of the central bank's monetary policy, and the Senate is considering whether to strip the Fed of its bank regulatory authority.
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