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Other News: Bernanke Defends Tenure as Fed Chief

December 3, 2009 at 12:00 AM EDT
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In other news, Ben Bernanke defended his tenure as Federal Reserve chairman before Congress on Thursday, and House Speaker Nancy Pelosi suggested using money left over from the Wall Street bailout to create more jobs.
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JIM LEHRER: in other news today: Job creation was the focus in Washington, with the unemployment rate now topping 10 percent. President Obama hosted a White House forum on that issue.

He acknowledged skepticism that such gatherings do any good, but he said he wanted to try.

U.S. PRESIDENT BARACK OBAMA: We cannot hang back and hope for the best, when we have seen the kinds of job losses that we have seen over the last year.

I am not interested in taking a wait-and-see approach when it comes to creating jobs. What I’m interested in is taking action right now to help businesses create jobs, right now, in the near term. While I believe that government has a critical role in creating the conditions for economic growth, ultimately, true economic recovery is only going to come from the private sector.

JIM LEHRER: House Speaker Pelosi suggested one way to create jobs is with leftover money from the Wall Street rescue effort.

But House Minority Leader John Boehner said the Democrats’ ideas are actually stalling job creation.

REP. JOHN BOEHNER, R-Ohio, house minority leader: The policies being proposed by this administration and their Democrat allies here in Congress are causing employers to sit on their hands.

They have got a stimulus bill that’s not working, spending that’s out of control, deficits that are out of control, a national energy tax, and now the government takeover of health care is causing employers to wonder what the policies here in Washington are going to mean to their future.

JIM LEHRER: The back-and-forth came as the government reported, new claims for jobless benefits fell for a fifth straight week. The report on overall unemployment for November is due out tomorrow.

A new batch of reports today pointed to a bumpy recovery. They said retail sales and activity in the service center were down last month. That data weighed on Wall Street, and the Dow Jones industrial average lost 86 points, to close at 10,366. The Nasdaq fell almost 12 points, to close at 2,173.

The chairman of the Federal Reserve, Ben Bernanke, defended his tenure today, and he promised to wind down the Fed’s sweeping intervention in the economy as soon as possible.

“NewsHour” congressional correspondent Kwame Holman has our report.

KWAME HOLMAN: Bernanke appeared before the Senate Banking Committee, seeking to win confirmation for a second term as Fed chairman.

BEN BERNANKE: Taken together, the Federal Reserve’s actions have contributed substantially to the significant improvement in financial conditions and to what now appear to be the — the beginnings of a turnaround in both the U.S. and foreign economies.

KWAME HOLMAN: Chairman Chris Dodd of Connecticut lent his support. But the committee’s top Republican, Richard Shelby of Alabama, said, the Fed has done a horrible job as a regulator.

SEN. RICHARD SHELBY, R-Ala.: Not everything that went wrong can be blamed on the system, because the system also depends on the people who run it. It’s those individuals who need to be accountable for their actions or their failure to act.

KWAME HOLMAN: That push for accountability took a more concrete form when Vermont independent Bernie Sanders announced he would put a formal hold on Bernanke’s nomination. He spoke on the Senate floor this afternoon.

SEN. BERNIE SANDERS, I-Ver.: We need a new Fed. We need a new Wall Street. And we surely a new chairman of the Fed. My hope is that President Obama will give us a new nominee, and not Mr. Bernanke.

KWAME HOLMAN: Back at the hearing, Kentucky Republican Jim Bunning pledged to fight Bernanke’s confirmation, too. He blasted the former Princeton professor for the Fed’s role in rescuing financial firms, such as insurance giant AIG.

SEN. JIM BUNNING, R-Kent.: The AIG bailout alone is reason enough to send you back to Princeton.

BEN BERNANKE: We absolutely believed that AIG’s failure would be an enormous systemic risk and would have imposed enormous damage, not just on the financial system — and this — this is the key point — on the entire U.S. economy and on every American.

KWAME HOLMAN: Bernanke acknowledged there were areas where the Fed should have done more, especially in consumer protection and bank regulation, that might have cushioned the housing market collapse.

But he said efforts in Congress to broaden oversight of the Fed, while stripping it of some regulatory power, could harm the agency’s independence. Despite the hold on his nomination, Bernanke is expected to be confirmed.

JIM LEHRER: The House has voted to cancel a one-year repeal of the inheritance tax. The bill calls for extending a 45 percent tax on estates larger than $3.5 million. Estates worth less than that amount would still be exempt. A similar bill is pending in the Senate.

The Senate cast its first vote on health care reform today. It agreed to safeguard coverage of mammograms and other preventive health screenings for women. The measure authorizes the health and human services secretary to make insurers cover the tests.

Maryland Democrat Barbara Mikulski was a co-sponsor.

SEN. BARBARA MIKULSKI, D-Md.: We want to be able to save lives, and we want to be able to save money. We believe universal access, and if you utilize the service, it’s because you have had the consultation with your doctor, and, at the end of the day, because we do know early screening and detection does save lives, and, at the same time, it saves money.

JIM LEHRER: A federal advisory panel had triggered a heated debate recently, when it said women in their 40s don’t need routine mammograms.

And Texas Republican Kay Bailey Hutchison warned the Democrats’ health care bill could let the government say who gets tested and who doesn’t.

SEN. KAY BAILEY HUTCHISON, R-Texas: While I certainly agree with Senator Mikulski about the importance of preventive services for women and insurance coverage decisions, I just can’t support her amendment, because we still have not one, but two government task forces and committees that will be in the middle of these health care coverage decisions.

JIM LEHRER: On another issue, the Senate refused to strip more than $400 billion in Medicare spending cuts from the health care bill.

A Cleveland man has pleaded not guilty by reason of insanity in the killings of 11 women. Anthony Sowell is a registered sex offender. His victims’ remains were found in and around his Cleveland home. Authorities have said he lured them there and attacked them.

The couple who caused a security break at the White House last week were no-shows at a House hearing today. Michaele and Tareq Salahi managed to get into a state dinner and even greet President Obama.

Secret Service Director Mark Sullivan told the hearing the president was never at risk, but he said three uniformed officers have been placed on administrative leave.

MARK SULLIVAN, director, U.S. Secret Service: While the investigation remains ongoing, preliminary findings have determined that established procedures related to entering the White House were not followed at initial checkpoint. An error in judgment, a mistake, was made. In our line of work, we can not afford even one mistake.

JIM LEHRER: The committee chairman, Democrat Bennie Thompson, warned, the Salahis will be subpoenaed. White House Social Secretary Desiree Rogers didn’t testify either, but it was unclear if she would be subpoenaed.

For his part, the president said today he has complete confidence in the Secret Service, despite the breach.

A British university announced today it will investigate claims that researchers manipulated climate data. Last month, thousands of e-mails from the scientists were stolen and put on the Internet. There have been claims the e-mails show the scientists hid evidence that undercuts the case for manmade warming. The head of the research unit resigned this week.

The ousted president of Honduras will not be allowed to serve the remainder of his term. The country’s congress voted Wednesday not to let Manuel Zelaya return to power. His reinstatement had been part of a deal the U.S. brokered to end the crisis in Honduras. Zelaya was forced out last June. On Sunday, a conservative rancher was elected to succeed him next January.