Paul makes Yellen hold threat official

Sen. Rand Paul (R-Ky.) warned Senate leaders Tuesday he will place a hold on Janet Yellen’s nomination to head the Federal Reserve until he gets a vote on his legislation to audit the body’s policy making. 

Paul sent a letter to Senate Majority Leader Harry Reid (D-Nev.) officially announcing the hold, which had been reported last week. 

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“I am writing to convey my objection to floor consideration of Dr. Janet Yellen to Chair the Board of Governors of the Federal Reserve without also considering legislation to bring much needed transparency to the Fed,” he said in his letter

President Obama announced Yellen’s nomination earlier this month to take over for current Chairman Ben Bernanke when he retires at the beginning of 2014. 

Yellen has not undergone a confirmation hearing, but is expected to receive enough votes in the Senate to be confirmed. Sixty votes would be required to break the hold and advance the nomination. 

Paul wants a vote on S. 209, the Federal Reserve Transparency Act, which would open up all of the Fed’s operations to audits from the Government Accountability Office, including monetary policy decisions. Paul’s father, former Rep. Ron Paul (R-Texas), has been a staunch critic of the Fed and called for its end. 

Paul noted that a similar piece of legislation passed in the House last July in a 327-98 vote, and said Reid had been a supporter of similar legislation in the past.  

“The American people have a right to know what this institution is doing with the nation’s money supply,” Paul said in a statement accompanying the letter. “The Federal Reserve does not need prolonged secrecy — it needs to be audited, and my bipartisan Federal Reserve Transparency Act will do just that.”

Bernanke has opposed any such audits that Paul proposes. While many aspects of the Fed are already open to audits, monetary policy moves have been exempted. Bernanke has warned of the nightmare scenario of opening the policy moves of the Fed up to second-guessing from politicians.