What's Plan B if Senate dawdles on Bernanke?

NEW YORK (CNNMoney.com) -- The Senate faces some weighty issues when it reconvenes this week. Health care. A jobs bill. The debt ceiling.

And then there's the Jan. 31 deadline to confirm Federal Reserve Chairman Ben Bernanke for a second term.

Nobody's really worried that Bernanke will lose his seat. But there is a chance the Senate won't vote before his term expires.

The question is: What happens then?

In back rooms at the Senate and the Fed, staffers and attorneys have been scratching their heads and looking at laws and historical precedents to figure out Plan B for temporary succession.

If the confirmation is delayed, Senate staffers generally believe that Bernanke must temporarily step down as chairman and that Donald Kohn, the vice chairman, should serve as acting chairman.

But some at the Fed argue that Bernanke can remain chairman temporarily.

The law on the matter is a little unclear.

The backstory: Bernanke has his critics in the Senate. Namely: Bernie Sanders, a left-leaning independent from Vermont who often votes with the Democrats, and Jim Bunning of Kentucky, Sanders' political opposite.

But insiders say that Bernanke has locked up more than the 60 votes necessary to break a Senate filibuster. In December, he won solid support from the Senate Banking committee.

Still, it's possible that the confirmation vote could run up against the clock. Even the process of cutting off a filibuster takes a couple of days, followed by up to 30 hours of final debate, according to Senate rules.

Rules vs. history: The law that created the Federal Reserve spells out rules for succession. But it doesn't address this specific case.

The law says that the chairman shall preside "at meetings of the board." It continues: "And in his absence, the vice chairman shall preside."

However, that language appears to be addressing a situation in which the chairman misses a board meeting in an emergency.

That happened in the wake of the Sept. 11 terrorist attacks. At that time, Fed Chair Alan Greenspan was in Switzerland for a banking conference and Vice Chair Roger Ferguson presided over board meetings to make emergency loans to banks, according to Fed staff.

The law also says that if there is no Fed chairman, and no vice chair, the board gets to elect a temporary chief or "pro tempore."

That has happened a couple of times. In 1996, Greenspan's reconfirmation was delayed, but he kept his job running the Fed board. With no vice chair, the board elected Greenspan as temporary chair until the Senate confirmation.

The same thing happened in 1948, when incumbent Fed Chief Marriner Eccles was elected temporarily in charge while he awaited reconfirmation.

The Greenspan and Eccles cases seem to provide some historical basis for the camp that argues Bernanke should be allowed to stay chairman.

But the circumstances surrounding Greenspan and Eccles were different in one key way: There were no vice chairmen in each case.

In Bernanke's case, of course, there is a vice chairman who could take the title of acting chairman.

What's next: Senate Banking Committee Chairman Chris Dodd, D-Conn., has urged his colleagues to move quickly on the confirmation process.

"If we do not complete this process, then Chairman Bernanke cannot serve as chairman of the Federal Reserve," Dodd said in December.

The question is causing a bit of a hubbub on Capitol Hill.

"That's always Washington for you," said Lawrence Kaplan, who runs the banking practice at the Paul Hastings law firm.

No one is expecting a palace coup or any change in Fed policy if the Senate doesn't act on time. Still, the succession issue has the potential to raise questions.

"The Fed chairmanship is something very sacrosanct -- and historically is shown extreme deference," said Kaplan, who said he believes the law favors the Senate's interpretation that Vice Chair Kohn should temporarily step up.

In the end, Senate leaders expect to head off any worries about temporary succession and finish up the confirmation before Jan. 31.

"We hope to reach an agreement to consider the nomination before the end of the month," said Regan Lachapelle, spokeswoman for Senate Majority Leader Harry Reid, D-Nev.