Over the objections of several key lawmakers, including Sen. Richard Shelby, the Senate Banking Committee approved Federal Reserve Chairman Ben Bernanke's nomination on Thursday to lead the central bank for another four years.
The panel vote, which was 16 to 7, sends the nomination to the Senate floor. Bernanke is expected to win approval from the full Senate, but Thursday's committee vote foreshadows a tough fight on the floor.
Shelby, the panel's highest ranking Republican, had remained undecided leading up to the vote. While he is a strong critic of the Fed, many observers had expected him to reluctantly support Bernanke. Instead, he offered a lengthy list of reasons to vote against the central banker.
"I strongly disapprove of some of the past deeds of the Federal Reserve while Ben Bernanke was a member and its chairman and I lack confidence in what little planning for the future he has articulated," Shelby said. "I will be opposing a second term for Dr. Bernanke as chairman."
Shelby was joined by five fellow Republicans and one Democrat — Sen. Jeff Merkley — in opposing Bernanke's nomination.
"Dr. Bernanke failed to ... remedy the factors that paved the road to this dark and difficult recession," said Merkley of Oregon. "It is clear Bernanke has not changed his overall approach of prioritizing Wall Street over families."
Sen. Jim Bunning, a long-time critic of the central bank, argued that Bernanke had "destroyed the independence of the Fed."
"He bowed to the political pressures of the Bush and Obama administrations and turned the Fed into an arm of the Treasury," Bunning said. "Walking arm-in-arm with the Treasury, Chairman Bernanke bailed out all the large financial institutions, including many foreign banks. And he put the printing presses into overdrive to fund the government's spending and hand out cheap money to Wall Street."
Senate Banking Chairman Chris Dodd, while noting the Fed's failings on banking supervision and consumer protection during Bernanke's tenure, said he deserved a second term for helping to save the economy from a second Depression.
"Chairman Bernanke must also receive some credit for the Fed's extraordinary actions in arresting this crisis and preventing an utter economic catastrophe," the Connecticut Democrat said. "Because of these actions, there is reason to believe that better days lie ahead."
Sen. Tim Johnson, D-S.D., echoed Dodd's sentiment.
"Mr. Bernanke's energetic response to the economic crisis kept our nation out of a Depression," he said. "Going forward, there is no doubt the Fed can do better, it can be more proactive and it can better communicate with Congress. But let's not forget what Mr. Bernanke and the Fed did right during the last many challenging months."
Bernanke's term as chairman ends on Jan. 31, and it is unclear whether the full Senate will vote on his nomination by that point. If it does not, Bernanke would remain in office until his nomination was approved or President Obama nominated someone else that won Senate approval.
Thursday's vote was a dramatic reversal from the praise Bernanke won on Wednesday when Time magazine named him the Person of the Year.