Federal Reserve Chairman Ben Bernanke vowed before taking office to follow in the footsteps of his storied predecessor, Alan Greenspan, but he will likely distance himself from the past as he seeks a second term.

After a devastating financial crisis and deep recession that eliminated 7.3 million U.S. jobs and cost taxpayers hundreds of billions of dollars to bail out banks and financial firms, political friends of the Fed seem few and far between.

While his confirmation does not appear in doubt, that popular discontent is likely to translate into aggressive, even hostile questioning on Thursday when Bernanke testifies before the Senate Banking Committee in a bid to win confirmation to a fresh four-year stint as Fed chairman.

The panel must approve his nomination before sending it to the full Senate for a vote. His term expires on January 31. It is unclear when the panel will act on the nomination.

My guess is he'll be confirmed, but he'll take a lot of flak, said Allan Meltzer, a professor of economics at Carnegie Mellon's Tupper School of Business in Pittsburgh and an expert on the Fed's history. We're in a bad period and the public is very unhappy. So that comes out in the Congress.

The tone of the questioning will reflect popular resentment over lavish government aid to some of the most profitable U.S. firms at a time millions of ordinary Americans face job losses and foreclosures.

It will also offer a taste of bitter political battles ahead as Republicans seek to link the country's economic woes to President Barack Obama and his fellow Democrats, with an eye to regaining a majority in one or both houses of Congress in mid-term elections next November.

FED'S ROLE

The confirmation hearing for the soft-spoken former economics professor will be as much about the future of the Fed as it will be about Bernanke himself.

Congress is considering steps that could dramatically curtail the Fed's responsibilities and would subject the Fed to unprecedented oversight from Congress. One measure fiercely opposed by the central bank would allow a congressional watchdog agency to audit the Fed's interest rate decisions.

The central bank's many critics contend it failed to rein in the risky lending practices that fueled the U.S. housing bubble. With the Fed scoring low in polls on trust in public institutions, hitting hard at the central bank may play well among voters of both political parties.

Senate Banking Committee Chairman Christopher Dodd, who is in a tough re-election campaign, may aim to dispel any accusation he is soft on the Fed or financial firms. He has said he is inclined to support Bernanke but has called the central bank's regulatory track record an abysmal failure.

Dodd is championing a regulatory reform plan that would strip the Fed of its primary bank oversight responsibility, and both Dodd and Democrats in the House want to take away its consumer protection powers.

Bernanke launched a preemptive strike in the debate over the Fed's role in a rare newspaper column, arguing that auditing monetary policy or stripping the Fed of its ability to oversee big banks would impair economic stability.

Fed officials have argued vehemently that subjecting their decisions on monetary policy to congressional second-guessing would undercut the central bank's independence in a way that could unnerve investors and drive interest rates higher.

They're not infallible, said Greg Valliere, chief policy strategist for Soleil Securities in New York. But foreign investors would be aghast if legislation to curb the Fed's independence continues to make progress.

LIVE AND LEARN

However, Bernanke will likely distance himself from the hands-off regulatory approach of the Greenspan era. He has already said the Fed should rely more heavily on regulation to keep asset bubbles from building.

He is also likely to argue that under his leadership, the Fed has moved aggressively to safeguard borrowers since the crisis broke, including recently putting in place a ban on debit card overdraft fees.

The Congress itself could have moved on some of these issues earlier, said Susan Phillips, a former Fed governor and now dean of the George Washington University School of Business in Washington. But when the economy's going great, that's not when people want to put in place more regulations.

Bernanke was approved by a voice vote in the Senate almost four years ago, after the banking committee approved his nomination with only one panel member -- Republican Jim Bunning, a perennial Fed critic -- in opposition.

This time, Bernanke is likely to draw more objections as lawmakers of both political parties acknowledge the public anger at the Fed and the dismal economy.

On the committee, Republicans Judd Gregg and Mike Johanns have voiced support for the Fed chair, while Democrat Senator Charles Schumer, like Dodd, has said he is inclined to back him. Independent Bernie Sanders, who votes with the Democrats and is not on the banking panel, has said he will vote against Bernanke when the nomination comes up on the Senate floor.

(Additional reporting by Donna Smith; Editing by Kenneth Barry)

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