Feb. 16 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke told lawmakers he'll follow Alan Greenspan's lead on interest rates and economics, while refusing to be drawn into political debates on taxes and spending.
Bernanke, in his first appearance before Congress since becoming Fed chief two weeks ago, brushed aside questions from lawmakers yesterday on specific legislative proposals, keeping a November pledge to avoid politically sensitive topics.
The new chairman's approach was a departure from Greenspan's willingness to discuss issues beyond monetary policy, which gave lawmakers a chance to enlist his support for their causes. Bernanke's reluctance to endorse proposals frustrated members of the House Financial Services Committee, who sought clear views on issues ranging from discrimination in home loans to the alternative minimum tax.
Bernanke ``doesn't have the political capital that Alan Greenspan had built up over 20 years,'' said James K. Galbraith, an economist at the University of Texas at Austin who advised lawmakers on the 1978 law that requires the Fed chairman to report to Congress twice a year, as Bernanke did yesterday. ``It would be a mistake to be weighing in on these deeply divisive political questions.''
Instead, Bernanke -- who appears today before the Senate Banking Committee -- laid out the options facing lawmakers and said they must choose.
``It's up to the Congress to decide, what are the priorities that we want to address, be it on the tax side or on the spending side,'' Bernanke said in response to Representative Artur Davis, an Alabama Democrat, near the end of the three-hour hearing. ``This is what the people have elected you to do, and clearly it's your responsibility.''
