WASHINGTON - The Senate on Tuesday moved to clear the way to confirm Ben Bernanke to a second term as Federal Reserve chairman, setting a procedural vote for Thursday in a sign that the needed votes were now secured.
President Barack Obama and Senate Democrats scrambled to drum up backing for Bernanke after a Republican won a stunning upset in a Massachusetts Senate race last week, largely because of voter anger about the economy.
Bernanke was in jeopardy of becoming the fall guy, and sudden doubts about his confirmation roiled financial markets. But a push by the White House and Senate allies slowly coaxed undecided senators into the Fed chairman's column.
Senate Majority Leader Harry Reid set a vote for Thursday to try to end a procedural roadblock put in place by Bernanke opponents.
Both Democrats and Republicans believe Bernanke now has the 60 votes to needed to overcome the hurdle, which would pave the way for a final confirmation vote, perhaps also on Thursday.
The votes will come with time running out for Bernanke, whose first four-year term as Fed chief expires on Sunday. Fed Vice Chairman Donald Kohn was poised to take the reins of the central bank if needed.
While the decision to move to a vote suggests Bernanke now has enough support, he looks certain to draw a record number of no votes for a nominee tapped to head the central bank.
A Reuters poll found 47 senators ready to back Bernanke, with 19 standing in opposition. Thirty-four senators were undecided.
Bernanke's confirmation had seemed assured until the Massachusetts election reshaped the political calculus.
Public ire at the financial bailouts the Fed helped lead even as the unemployment rate was climbing into in double digits has made a potent political brew for senators facing re-election in November and undercut Bernanke's support.
When the Senate takes up the nomination, there will be an hour of debate before the procedural vote. Clearing that hurdle would pave the way for up to 30 hours of further debate before a final vote.
Bernanke actively sought to salvage his nomination in meetings with senators, but on Tuesday he turned from politics to policy, opening a long-planned two-day meeting of Fed officials to plot interest-rate strategy.
While Bernanke, who was first named to the Fed chairmanship by President George W. Bush, has been credited with capably steering the economy through the worst financial storm in decades, he is under fire for the Fed's hands-off regulatory and easy money policies that preceded the meltdown.
Politicians are casting around for a boogeyman that they can point a finger at, said Stephen Stanley, chief economist at RBS Securities in Stamford, Connecticut.
The timing of Bernanke's reappointment vote could not have come at a worse time.
A senior Fed official warned that Bernanke's rocky path to confirmation suggests a worrisome attempt to exert political influence over the decisions of the central bank.
The impulse to use Mr. Bernanke as a political punching bag raises the specter that, instead of doing the right thing, Congress may seek to pressure the Fed to print its way out of this crisis, Dallas Federal Reserve Bank President Richard Fisher wrote in the Wall Street Journal.
Fisher said if the Fed were to succumb to pressure to print more money than economically wise, inflation would ensue.
Bernanke became a Fed board member in 2002 and later served as a White House economic adviser before Bush tapped him to head the central bank as chairman. President Obama selected him for a second term in August, praising him for his efforts to buffer the economy from the financial crisis.
(Additional reporting by Susan Cornwell, Donna Smith and Pedro da Costa in Washington, and Kristina Cooke in New York; editing by Chris Wilson)