OAK BLUFFS, Mass. (AP) -- President Barack Obama announced Tuesday he wants to keep Ben Bernanke on as Fed chairman, saying he shepherded America through the worst economic crisis since the Great Depression.
"Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and out-of-the-box thinking that has helped put the brakes on our economic freefall," said Obama, with Bernanke standing by his side. "Almost none of the decisions he or any of us made have been easy."
Obama made the announcement while on vacation on the island of Martha's Vineyard off the coast of Massachusetts after aides said initially that the president intended a news-free week there. Both he and Bernanke sported the open-collar look.
Bernanke, 55, is credited with turning the economy away from its deepest and longest recession since the 1930s. Now he faces the challenge of meeting White House expectations to chart the full economic recovery considered critical to Obama's legacy.
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. 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.
The announcement also came nearly concurrently with a piece of bad economic news. Obama interrupted his vacation to telegraph his decision just ahead of a White House report that gave more bleak assessments of the nation's deficit picture.
Figures released by the White House budget office on Monday foresee a cumulative $9 trillion 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.
The White House said Obama decided on the last-minute schedule addition to help "put him more in 'vacation mode." ''There's been a lot of speculation out there, and the president wanted to put it to rest," Deputy Press Secretary Bill Burton told reporters as the presidential entourage headed from the site of the announcement to a golf course.
Bernanke's early tenure was as complicated as the crisis facing the banks he sought to save.
The Fed chairman's successful, although unconventional, strategy to move the economy away from recession, unlock frozen credit and stabilize spiraling financial markets depended in large part on creating radical and unprecedented lending programs. But he's not without his detractors, and the Democratic chairman 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.
With such controversy surrounding some of his decisions, Bernanke's fate had been the subject of speculation for months.
Many on Wall Street and in academic circles had viewed Bernanke as the best choice to tackle continued high unemployment, fight off any threat of inflation and take on the next set of risky, difficult decisions.
Announcing his decision to bypass prominent Democratic economic figures for the job, Obama had nothing but praise for Bernanke.
The president also put in a plug for his own administration's actions to stabilize the financial system, restructure the auto industry and approve $787 billion in stimulus spending.
Appearing in makeshift press workspace on the island, Bernanke said that if confirmed by the Senate, he'd work to provide "a strong foundation for growth and stability" in the economy.
"The Federal Reserve, like other economic policy makers, has been challenged by the unprecedented events of the past few years," Bernanke said. "We have been bold or deliberate as circumstances demanded, but our objective remains constant: to restore a more stable financial and economic environment in which opportunity can again flourish and in which Americans hard work and creativity can receive their proper rewards."
The economy is emerging from recession and is poised for growth. However, it will be slow-going and the unemployment rate, now at 9.4 percent, is likely to top 10 percent this year before it starts going down.
For Obama, there was little political downside in choosing to nominate Bernanke. The move displays bipartisanship and a steady, unchanging hand on the economic tiller. Fully occupied with an attempted health care overhaul, Obama's team could little afford the distraction of changing the head of the Fed.
Bernanke was appointed Fed chairman by President George W. Bush and sworn in Feb. 1, 2006, following Alan Greenspan's 18-year tenure.
Associated Press writers Jim Kuhnhenn in Washington, Jeannine Aversa in Jackson Hole, Wyo., and Glen Johnson and Jason Bronis in Oak Bluffs, Mass., contributed to this report.