Bernanke tries to reassure the GOP

Federal Reserve Chairman Ben Bernanke is testifying for the first time before Rep. Paul Ryan's Budget Committee today, and his prepared remarks are worth a read. Message? Nothing much to see here.

Inflation is low, employment is depressed, and the economy is growing but not fast enough, Bernanke says. Therefore, the Fed has to act. But he's careful to try to argue that the Fed's latest actions, which haven't been particularly popular among Republicans in general and Ryan in particular, are less unconventional than many in the party have suggested. "Although large-scale purchases of longer-term securities are a different monetary policy tool than the more familiar approach of targeting the federal funds rate," Bernanke argues, "the two types of policies affect the economy in similar ways."

In other words, if you believe in the Fed's normal activities -- and most in Congress say they do -- quantitative easing shouldn't scare you. Nor should you think the Fed is running off in a new direction, with new priorities. "We remain unwaveringly committed to price stability," Bernanke promises, "and we are confident that we have the tools to be able to smoothly and effectively exit from the current highly accommodative policy stance at the appropriate time." Bernanke's hope is that he can persuade Republicans who've grown skeptical of the Fed over the past two years that there's no difference between the Fed now and the Fed when Alan Greenspan was in charge.

Of course, some in Congress didn't like the Fed even back when Greenspan was helming it. In particular, Rep. Ron Paul, who is chairing his first hearing today as head of the committee that oversees monetary policy -- which is to say, the committee that oversees the Fed. Paul, of course, recently published a book titled "End the Fed," so he's not exactly a friendly face. And eventually, Bernanke is going to have to head over to his hearing room. That's when the sparks will really fly.

Photo credit: Jim Watson/AFP/Getty Images.