Obama appoints Bernanke to 2nd term

U.S. President Barack Obama announced Tuesday he wants Ben Bernanke to get a second four-year term as head of the Federal Reserve, praising the banker's "calm and wisdom" in the face of a near financial collapse.

Obama, standing alongside Bernanke for the statement on the island of Martha's Vineyard on Tuesday, said Bernanke led the country "through one of the worst financial crises the world has ever seen.

"I knew [Bernanke was] an expert on the Great Depression," Obama said. "But I don't think he expected he'd be in charge of averting another one."

The vacationing president also said Bernanke, 55, tackled the crisis "with bold action and outside-the-box thinking" that helped limit the damage.

If approved by the Senate, Bernanke would continue to head the world's leading body on monetary policy.

Though his stature has improved in lockstep with an economy showing signs of a rebound, Bernanke is not without his detractors. The Democratic chair of the Senate banking committee, Connecticut's Chris Dodd, immediately warned of a thorough hearing before Bernanke would be confirmed for a second four-year term.

The move was designed to reassure the U.S. financial sector as well as foreign central banks that the Obama administration isn't changing course on its largely well-received approaches to the financial meltdown and overall monetary policy.

In sticking with a Republican for the nation's top banker, the Democratic president was aiming for stability at a time of continuing, though easing, crisis.

Thanking the president for his confidence, Bernanke vowed to continue the Federal Reserve's efforts in tackling inflation.

"Our goal remains constant — to create an environment where Americans hard work can receive their proper rewards.

"I will work to my utmost ability to create an environment of price stability."

Move diverts attention from bleak deficit data

Obama was eager to trumpet the move, as it came on the heels of a piece of bleak economic news.

Figures released by the White House budget office on Monday foresee a cumulative $9-trillion US deficit from 2010-2019, $2 trillion more than the administration estimated in May.

Moreover, the figures show the public debt doubling by 2019 and reaching three-quarters the size of the entire national economy.

Also Monday, analysts with the non-partisan Congressional Budget Office projected a cumulative $7-trillion deficit from 2010-2019, more in line with the administration's May estimate.