Asked about Federal Reserve Chairman Ben Bernanke who has been nominated by President Obama for a second term heading the nation’s central bank, Shelby said, “I believe if you look at his record objectively, you shouldn’t vote for him.”
“I believe the Federal Reserve is part and parcel of the whole problem [that led to the recent financial crisis], that helped create the problem – loose money and too little regulation Now they want to ride to the rescue with the taxpayers’ money. I believe that is not a good record by the Fed, led by Ben Bernanke. I intend to vote against him.”
Asked whether not confirming Bernanke could spook already shaky financial markets, Shelby brushed aside the suggestion that protecting the markets is a reason to back Bernanke.
“Whatever happens, will happen,” Shelby, the Ranking Republican on the Senate Banking Committee, told CNN Chief National Correspondent John King. “I don’t’ believe any sell-off would last very long because if [Bernanke] goes down, the president would have to and would come up with somebody that I believe would be stronger.”
“Most sell-offs are short-lived and then you have a rally,” Shelby also said Sunday. “So let’s don’t buy into that. Let’s buy into the record of Ben Bernanke. It’s not a good one,” the Alabama Republican told King.
Shelby also said Sunday that he opposes a tax on some of the nation’s largest banks that was recently proposed by President Obama as a way to recover projected losses from the financial bailout program also known as Troubled Asset Relief Program (“TARP”).
“I think the tax is wrong,” Shelby said. The Republican senator pointed out that many of the banks that would pay the new tax have already repaid the TARP funds loaned to them by the federal government while other companies including A.I.G. and some of the automakers who have not repaid their TARP loans would not be taxed under Obama’s proposal.
“I don’t want to tax anybody. I think it takes money out of the economy. And if you tax banks – over do it – this economy is never going to recover because they’re not going to make loans.”
Shelby also came out against a bipartisan commission under consideration in Congress that would make recommendations on how to reduce the national debt. A statutory proposal, which only recently won President Obama’s support, would charge a bipartisan group with making recommendation which the Congress would then be able to accept or reject wholesale without making any changes.
“John, I wouldn’t support a commission like that,” Shelby told King. “I believe basically it’s a cover for more taxes and a few cuts. We’ve been down this road before. But if it were just to look at cuts, I would support a commission because a commission could help us that way.”
Shelby, who switched from the Democratic Party after Republicans took control of Congress in the 1994 midterms, also had encouraging words for any of his colleagues on Capitol Hill who might be considering leaving Democratic ranks.
“I tell them that, all the time, I think it’s just a question [of ] would you feel more comfortable more so with the Republicans or the Democrats. And would you fit in? And, if you do, we’ve got a place for you,” Shelby said Sunday.
Calling Republican Scott Brown’s upset win in Massachusetts a repudiation of the president’s ambitious plans for health care reform, Shelby also took a parting shot at the phrase “change you can believe in,” one of Obama’s trademark 2008 campaign slogans.
“I hope the president, and I hope a lot of my Democratic friends, have gotten the message that the American people, they like change but gradual change. Not change they can’t handle, change the don’t understand, and change that’s not needed.”