Time's Person of the Year May Not Be Confirmed

Ben Bernanke's nomination to another term as head of the Federal Reserve could be in trouble:

The closer-than-expected vote in the Senate Banking Committee to recommend Ben Bernanke’s confirmation for a second term as chairman of the Federal Reserve raised at least one new question: What would happen if the full Senate does not go along?

Without controversy, Bernanke would need just a simple majority – 51 votes -- in the Senate to secure another four years at the helm of the Fed, but that hurdle jumps to 60 if Senators Bernie Sanders (I-VT), Jim DeMint (R-SC), Jim Bunning (R-KY) and David Vitter (R-LA) carry out their threats of a filibuster. Those threats make it all but certain Bernanke will need 60 votes to win a second term. A cloture vote to cut off debate requires 60 votes.

Bernanke actually wears three hats: he's a member and chairman of the Federal Reserve’s Board of Governors and Chairman of the Federal Open Market Committee. It is the FOMC which sets monetary policy.

He was appointed simultaneously in January 2006 to a 14-year term as a member of the Board of Governors and a four year term as chairman. It is his chairmanship which is now before the Senate.

If he is not reconfirmed as chairman of the Board of Governors, he would remain a member but Donald Kohn, the Vice Chairman of the Board, would serve as chairman.

Larry Kudlow thinks perhaps Bernanke would be wise to withdraw his nomination before an embarrassing Senate fight takes place. That would be an interesting turn of events after just being named Time Magazine's Person of the Year.