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Bush renominates greenspan for fifth term { May 18 2004 } Original Source Link: (May no longer be active)
http://www.nytimes.com/2004/05/18/business/18CND-GREE.htmlhttp://www.nytimes.com/2004/05/18/business/18CND-GREE.html
May 18, 2004
Bush Renominates Alan Greenspan for Fed
By KENNETH N. GILPIN
President Bush, sticking to a pledge he made more than a year ago, renominated Alan Greenspan today as chairman of the Federal Reserve.
"Alan Greenspan has done a superb job as chairman of the Board of Governors of the Federal Reserve System," Mr. Bush said in a statement, "and I have great continuing confidence in his economic stewardship."
Mr. Greenspan's nomination was announced as he met at the White House with the president. In a statement the chairman's office issued later this afternoon, Mr. Greenspan formally accepted the president's offer to serve another four-year term, saying he was "honored."
But one Republican member of the Senate Committee on Banking, Housing and Urban Affairs, Senator Jim Bunning of Kentucky, said he would not rubber-stamp Mr. Greenspan's nomination.
"I'm strongly against it, and I will oppose it," said Mr. Bunning, who previously expressed disapproval of Mr. Greenspan's monetary policies.
At a hearing in February, Mr. Bunning told Mr. Greenspan directly that he would not support his renomination because "you've been too slow to help the economy — it's time for you to go."
Neither Mr. Bush's announcement today nor Mr. Greenspan's willingness to continue as chairman comes as a surprise. Just over a year ago, Mr. Bush said that he intended to nominate Mr. Greenspan, who turned 78 in March, to a fifth term.
In a meeting with business and financial reporters on April 23, 2003, Mr. Bush was asked if he intended to renominate Mr. Greenspan, whose current term as Fed chairman expires June 20, 2004. The president said he would.
Later that day, Mr. Greenspan issued a statement saying he "greatly appreciated" Mr. Bush's confidence, and would serve if he was again confirmed by the Senate.
"I assumed a year ago that it was a done deal," said David Resler, chief economist at Nomura Securities International.
To accommodate Federal Reserve rules, Mr. Bush said he was renominating Mr. Greenspan for a term not to exceed four years.
Mr. Greenspan, who took over as Fed chairman in August 1987, succeeding Paul A. Volcker, has been chairman for 17 years.
However, in addition to his role as chairman, Mr. Greenspan is also a Fed governor. And his term as governor expires on Jan. 31, 2006.
Under law, a board member who has completed a full 14-year term cannot be reappointed for another Fed term. However, a Fed board member can continue to serve once his term has ended until the president nominates and the Senate confirms a successor.
Mr. Greenspan assumed the remaining years of Mr. Volcker's unexpired term as governor when he became chairman. His own full 14-year term began Feb. 1, 1992.
By renominating Mr. Greenspan today, Mr. Bush effectively eliminated the issue of who will succeed Mr. Greenspan until well after the upcoming presidential election.
Mr. Greenspan was chairman of the Council of Economic Advisers under President Gerald Ford from 1974 to 1977. President Ronald Reagan nominated him to succeed Mr. Volcker at the Fed in 1987. Mr. Greenspan was renominated by President Bush's father, President George Bush, and twice by President Bill Clinton.
Mr. Greenspan's tenure as chairman has been longer than any of his predecessors with the exception of William McChesney Martin, who was first nominated for the top Fed position by President Harry Truman and served into the start of the Nixon administration.
As Senator Bunning's statement showed, Mr. Greenspan is not without his critics. In particular, some lawmakers and economists have cited his penchant for commenting on tax and fiscal policy, areas that are not a part of the Fed's purview. But under Mr. Greenspan, the Fed has generally won widespread praise for the way it has conducted monetary policy.
"During his tenure, inflation has come down to the minimum levels," Mr. Resler said. "And he has managed to steer a monetary policy course that has contained several crises, from the 1987 stock market crash to the Long Term Capital Management problems of 1998, the stock market collapse after 2000 and the post-Sept. 11 world."
Mr. Resler and others also praised Mr. Greenspan's Fed for greater transparency in its conduct of monetary policy. That new openness is perhaps best seen in statements issued after meetings of the Fed's policy-making Open Market Committee.
Before Mr. Greenspan, the central bank would not comment on how the Open Market Committee had voted at those meetings.
"I don't know of any economist who would criticize him for being more transparent," Mr. Resler said.
Copyright 2004 The New York Times Company
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