Senate Panel Approves Fed Nominee

The Senate Banking Committee, on Wednesday approved the nomination of Ben Bernanke to be the next chairman of the Federal Reserve, a position seen by many as the second-most influential job in the country.

The panel, by voice vote, favorably recommended his confirmation to the full Senate. Considered one of the country's leading economic thinkers, Bernanke is expected to get a positive vote there as well; the timing of when that will happen was still being nailed down.

Sen. Jim Bunning, R-Ky., was the only senator present voicing opposition to Bernanke. Bunning cited concerns that the nominee would be too much in the mold of Greenspan and not sufficiently an independent thinker.

Bernanke, 51, is a former Princeton professor and Fed governor who now serves as chairman of the White House Council of Economic Advisers. Lawmakers and the administration are wasting no time on his nomination because they want him ready to take over when the 79-year-old Alan Greenspan retires Jan. 31 after 18-plus years at the helm.

The choice of the well-respected Bernanke is seen as a safe one for Bush, whose job approval ratings are at a low ebb.

If confirmed as expected, Bernanke will lead the Fed at a time when the economy faces challenges, including bloated budget and trade deficits and worries about whether the high-flying housing market will crash. There also are concerns about high energy prices and the lackluster jobs market.

The panel vote came just one day after Bernanke offered the committee insights into his thoughts on a wide variety of economic and financial issues during a three-hour hearing on his nomination before the Senate Banking Committee.

Bernanke told senators on Tuesday that if confirmed as Fed chief he will not veer widely from the policies of Greenspan.

And, he sought to assure lawmakers, investors and the public that he would make decisions on interest rates and other matters based on economic considerations, not political ones. "I will be strictly independent of all political influences," he vowed.

Bernanke also said he would move slowly and seek to build a consensus on the notion of inflation targeting, that is, numerically spelling out acceptable bounds for inflation. That's one area where he and Greenspan differ. Bernanke supports a numerical inflation target, Greenspan doesn't.

While Greenspan has argued that inflation targets can restrain the Fed's flexibility, Bernanke said that would not be the case.