Bernanke has a Republican problem

Another Republican swing vote that looked as if it was up for grabs has just gone against Bernanke – Kay Bailey Hutchison. Bernanke can rely on Republicans Bob Corker and Judd Gregg. But with David Vitter also saying he does not want to proceed before there is more information on AIG – and hardcore opponents Jim Bunning and Jim De Mint guaranteed No votes – that looks like at least half the Republican group on the commitee against by my calculations.

This follows an earlier blow for Fed chairman Ben Bernanke – Richard Shelby, the ranking Republican on the Senate Banking Committee, will vote against Bernanke’s reconfirmation for a second term. I think that could mean half or more of the Republicans say no.

Bernanke should still win the vote, but a Republican revolt is a problem. A narrow mandate would not stop him doing what he wants as Fed chief – but it would weaken his hand further in the political debate about reforms that would weaken the Fed’s powers and independence. Plenty to worry about here.

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