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washingtonpost.com Bush Renominates Greenspan as Chairman of the Fed By Nell Henderson Washington Post Staff Writer Tuesday, May 18, 2004; 5:09 PM President Bush today nominated Alan Greenspan to serve a fifth term as chairman of the Federal Reserve Board, providing financial markets with a source of stability at a time of economic transition. Bush said more than a year ago that he intended to nominate Greenspan, 78, whose term as chairman expires June 20. And Greenspan had indicated then he would happily accept. But the lack of movement on the matter since then had provoked some speculation among analysts that either of the two men might have had a change of heart. The president put that to rest today, issuing a statement announcing his intention to renominate the chairman and adding, "Alan Greenspan has done a superb job . . . and I have great confidence in his economic stewardship." White House press secretary Scott McClellan went further, saying that "the president wants [Greenspan] to continue to serve as long as possible." Greenspan, who met with Bush today, responded with a statement saying he was honored by the nomination and the opportunity "to continue my service" as central bank chief. Financial markets had little reaction to the news, a welcome respite from recent swoons that pushed some stock indexes Monday to five-month lows, as investors worried about record oil prices, rising interest rates and higher inflation. "If it hadn`t happened, there would have been great instability" in the markets, said Diane Swonk, chief economist for Bank One Corp. The action provides "much needed certainty in what was becoming an uncertain world." Senate confirmation should be swift, given the breadth of Greenspan`s support on the Senate Banking Committee. The panel`s chairman, Sen. Richard Shelby (R-Ala.), "believes Chairman Greenspan has done an outstanding job and looks forward to supporting his nomination in the Senate," said Andrew Gray, communications director for the panel. Greenspan was first appointed Fed chairman in 1987 by President Ronald Reagan to replace outgoing chairman Paul Volcker, who has been credited with launching the long, painful and ultimately successful central bank campaign to bring inflation down from the double-digit highs it hit in the late 1970s. Greenspan was reappointed as chairman once by the President George H.W. Bush, father of the current president, and twice by President Clinton. His current four-year term as Fed chief expires June 20. If confirmed, his next four-year term as chairman would expire June 20, 2008. But it`s not clear whether he will continue that long because his term as a Fed board member expires in less than two years. The Fed chairman must be selected from the seven Fed Board members. Although the chairman can be reappointed, a board member may not serve more than one full 14-year term. Greenspan served out the last years of Volcker`s board term, and was reappointed to a board term that will expire Jan. 31, 2006. Greenspan could choose to step down as chairman then, if he felt it inappropriate to continue in an expired board seat. But under the law, he also could continue in the board seat until the Senate confirms a successor. If the president did not nominate a successor, Greenspan could continue in the seat and as chairman for the next four years. McClellan, responding to reporters` questions, declined to speculate about what will happen when Greenspan`s board term expires. In 2000, Clinton renominated Greenspan as chairman early in the year, removing it as a campaign issue or source of financial market jitters in an election year. Clinton had not acted so preemptively in 1996. Instead, he allowed Greenspan`s term as chairman to lapse, forcing him to serve as chairman "pro-tem" from March 3 until he was confirmed by the Senate June 20. In 1991, the first President Bush waited until Aug. 9, two days before Greenspan`s term as chairman was about to expire, to give him a recess appointment to continue as chairman. Some of the jitters about Greenspan`s prospects this year arose from memories of how the first Bush White House blamed the Fed chairman for not cutting interest rates fast enough in response to the 1990-91 recession, costing that president the 1992 election. The elder Bush once said of Greenspan, "I reappointed him and he disappointed me." This presidential election year, Greenspan has made clear that the Fed will start raising interest rates soon to prevent the rapidly growing economy from fueling a takeoff in inflation. Many analysts and investors expect the Fed to raise its target for short-term rates from 1 percent to 1.25 percent at the next policymaking meeting in late June. Many other interest rates determined by the markets, such as mortgage rates, have already jumped higher in anticipation and appear headed up farther. But Bush emphasized the positive today, crediting his tax cuts and the Fed`s low interest rate policy with stimulating the economy`s robust recovery from the 2001 recession. "Sound fiscal and monetary policies have helped unleash the potential of American workers and entrepreneurs and America`s economy is now growing at the fastest rate in two decades," Bush said in the statement. Another set of rumors about the Fed chairman`s future swirled around Greenspan`s age and health, provoked apparently by the fact that he cancelled a scheduled public appearance earlier this year because of a bad cold. © 2004 The Washington Post Company |
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| aus der Diskussion: | Guten Morgen Mr. Bush |
| Autor (Datum des Eintrages): | Joerver (18.05.04 23:42:58) |
| Beitrag: | 16,541 von 35,423 (ID:13176483) |
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