Appointments will influence future of most Americans

Bush has put his mark on the nation's highest court and the central bank.
WASHINGTON (AP) -- Seizing on a rare alignment of opportunities, President Bush has moved swiftly in recent weeks to project his influence into the future and over the lives of nearly all Americans.
His appointment of a Fed chairman to succeed the venerable Alan Greenspan and the filling of two Supreme Court vacancies carry the potential to affect people's lives more directly than most of the heated policy debates in Congress.
At stake are social and economic issues vital to everyone: from abortion to religion, to when the police can pull you over and how much you will pay for certain loans, to the timing of the next recession.
In short order, Bush put his mark on two powerful entities over which presidents and Congress have infrequent authority, the nation's highest court and its central bank. It comes despite a host of woes on other fronts.
Every president should get a chance to name or reappoint a Fed chairman. "But Supreme Court appointments are a matter of geriatrics and luck," said Henry J. Aaron, a Brookings Institution scholar.
It is rare for a president to be able to name a Fed chairman and two Supreme Court justices within a span of a few months.
How long they serve
Justices get lifetime appointments. Fed members get 14-year appointments, although the chairmanship is up every four years.
If confirmed by the Senate, Ben Bernanke, now the top White House economist, will take over the reins of the economy from Greenspan at the end of January. Greenspan was first appointed as chairman by President Reagan in 1987.
Bush's selection of conservative judge Samuel Alito to fill the retiring Sandra Day O'Connor's seat rounds out Bush's court picks -- not counting the president's brief and doomed effort to put White House counsel Harriet Miers on the court.
Alito, if confirmed, would join Bush's other recent appointment, Chief Justice John Roberts. In naming two conservatives, Bush seized on an opportunity to move the court to the right.
Any such shift could show up early next year. What has often been a 5-4 court, with O'Connor frequently joining liberals, could become a 5-4 court with a conservative bent. That could be crucial on contentious issues as abortion, religion and capital punishment.
While the Supreme Court has gotten the most attention, the Fed chairmanship also is crucial -- and the opening comes at a delicate time for the economy.
The Fed sets short-term interest rates and oversees the banking system. The Fed can regulate the amount of money available, pumping more cash into the economy when things slow down and withdrawing money from the system when the economy overheats. It can easily trigger a recession by doing too much or too little.
Greenspan has raised short-term interest rates 12 times over the past 18 months to keep inflation at bay. He has been widely credited with doing a good job during his long tenure.
What's ahead
But danger signs are flashing. Bernanke takes over with consumer price inflation climbing at an annual rate of 4.7 percent, the highest annual rise since 1991. Home prices are soaring in certain markets and energy prices are elevated.
Bernanke is seen as an inflation hawk, just as committed to the inflation battle as Greenspan.
"I think Bernanke will have one or two rounds of tightening (further raising interest rates) early in his term," said Mark Zandi, chief economist at Economist.com, a research firm. "I think he would want to establish his inflation-fighting credentials clearly and definitively."
If Bernanke moves the central banks to raise rates too high, the economy could stall.
"This is a similar point in the business cycle to when Greenspan took over the reins of the Fed," Zandi said. "And of course he was tested right away with the 1987 stock market crash."
At his first meeting as Fed chairman in August 1987, Greenspan pushed up short-term interest rates. Many analysts say that contributed to the stock market crash just two months later.
Clearly the economic and social stakes are high for Bush's Supreme Court and Fed appointments.
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