BERNANKE
Danny Johnston  /  AP file
If approved by the full Senate, as expected, Bernanke would take over as chairman of the White House panel from tax expert Harvey Rosen, who is expected to return to his teaching post at Princeton University later this month.
updated 6/9/2005 6:12:14 PM ET 2005-06-09T22:12:14

The Senate Banking Committee on Thursday approved the nomination of Federal Reserve Governor Ben Bernanke to head the White House Council of Economic Advisers, sending it to the full Senate for a final vote.

The panel approved the nomination on a 11-1 vote, with Senator Jim Bunning, a Kentucky Republican, voting against the nomination.

If approved by the full Senate, as expected, Bernanke would take over as chairman of the White House panel from tax expert Harvey Rosen, who is expected to return to his teaching post at Princeton University later this month.

Bernanke, a noted monetary scholar, is often mentioned as a potential successor to Fed Chairman Alan Greenspan, who is set to step down from his post early next year.

At the CEA, Bernanke will need to champion President George W. Bush’s politically difficult goal of revamping Social Security with private accounts. He would also need to help build support for an overhaul of the tax code, another top White House objective.

Bernanke has served at the central bank since August 2002. He has recused himself from monetary-policy deliberations since Bush nominated him in early April, but will stay at the Fed until confirmed in his new post.

Sources say former U.S. Treasury chief economist Richard Clarida, currently with the hedge fund Clinton Group, is being eyed by the White House to fill Bernanke’s seat at the Fed.

In addition to searching for successors for Greenspan and Bernanke, the White House will soon need to find someone to succeed Fed Governor Edward Gramlich, who has said he will step down at the end of August.

If the Senate does not act swiftly on Bernanke’s nomination, the three-member CEA could soon be vacant. Rosen is leaving shortly and CEA member Kristin Forbes departed last week. The third seat has been empty since the panel’s previous chairman, Gregory Mankiw, stepped down in February.

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