By Thomas Ferraro and Donna Smith
WASHINGTON (Reuters) - President Barack Obama's two stalled nominees for the Federal Reserve are likely to clear a Senate procedural hurdle on Thursday, paving the way for anticipated confirmation, the chamber's leaders said on Tuesday.
Democratic and Republican aides said they expect Senate approval of the pair as early as Thursday, shortly after the procedural vote, which would take the Fed's Washington-based board up to its full seven-person strength for the first time since April 2006.
"We've been waiting months and months. It's important we have a fully functioning Fed," Senate Democratic leader Harry Reid told reporters.
Since officials on the central bank's board are usually aligned with the chairman on matters of policy, Senate approval of the nominees - Harvard economist Jeremy Stein and investment banker Jerome Powell - could strengthen Ben Bernanke's hand if he decides the economy needs more support.
Last month, Bernanke left the door open to further steps to buttress growth but said Fed policy appeared "more or less in the right place." The Fed has held overnight interest rates near zero since late 2008 and has bought $2.3 trillion in government and mortgage-related bonds to push other borrowing costs down.
Republican Senator David Vitter objected to both nominees, saying he worried they would provide "rubber stamps" for Bernanke's policies, and he called for a full debate.
Vitter's move had raised the specter the Senate might abandon the nominees, leaving a decision on filling out the Fed board to whoever wins the presidential election in November.
But Reid, with Republican support, moved to confirm and seat them. He scheduled a procedural vote for Thursday and expressed hope the nominees that Obama put forward in December would secure the 60 votes needed to move toward final approval.
Democrats hold the Senate, 53-47, meaning they need at least a few Republicans votes to reach the needed 60.
"My impression is that there is bipartisan support," Senate Republican Leader Mitch McConnell told reporters.
A senior Democratic aide described the two as a "balanced pair," saying that while Obama formally nominated both of them, Powell had been "hand-picked by Senator McConnell."
Don Stewart, a spokesman for McConnell, said the Kentucky senator did not "hand-pick" any nominee.
A Democratic aide said a final confirmation vote would likely come on Thursday, with both Democrats and Republicans agreeing to only a brief debate.
However, Republicans could push a vote into Friday or early next week if they wanted more time to discuss the nominees.
Stein, who holds a doctorate in economics from the Massachusetts Institute of Technology, is a Harvard economist who served briefly as a senior adviser to Treasury Secretary Timothy Geithner and as a staff member for Obama's National Economic Council. He specializes in stock price behavior, corporate investment and financing decisions, risk management and business capital allocation.
Powell is a lawyer who brings Wall Street experience, having worked at Bankers Trust, the Carlyle Group and Dillon Read after serving as a Treasury undersecretary in the administration of former President George H. W. Bush. His knowledge of financial markets could help fill the gap left by Kevin Warsh, a former Morgan Stanley executive who left the Fed a year ago.
By choosing a pair of nominees with Democratic and Republican credentials, Obama had hoped to win quick approval.
Fed board terms run for 14 years but Stein and Powell have been nominated to fill out unexpired terms. Powell's term would end on January 31, 2014, and Stein's would end on January 31, 2018.
(Reporting by Tom Ferraro and Donna Smith; Editing by Anthony Boadle, James Dalgleish and Paul Simao)