Sen. Rand Paul (R-Ky.) is reportedly threatening to place a hold on Janet Yellen's nomination to serve as the next chairman of the Federal Reserve.
Citing a source close to Paul, CNBC reported Friday that Paul, an outspoken Fed critic, had told Senate leaders that he was considering blocking her nomination, and wanted the Senate to vote on his legislation that would require the Fed's policymaking to be fully subject to a government audit.
The president nominated Yellen to take over for the outgoing Ben Bernanke earlier this month. She has yet to appear before the Senate Banking Committee, but barring a hold, she was generally expected to receive enough votes to be confirmed.
Paul's father, the former Congressan Ron Paul (R-Texas), was a longtime critic of the central bank and has called for its abolishment. Now retired, Paul finally got the House to vote on his Fed audit bill in 2012, where it easily passed. But Senate Majority Leader Harry Reid (D-Nev.) said he would not take up the bill after it passed.
The legislation offered by Sen. Paul would subject all the Fed's operations, including its monetary policy decisions, to audits from the Government Accountability Office. Many of the Fed's operations are already subjected to various levels of oversight, but the deliberations of the central bank's policymakers have been exempted.
While Bernanke has exhibited a light touch in making recommendations to Congress, he vigorously opposed such audit legislation. He argued that letting members of Congress call for GAO audits of certain monetary policy moves could subject the Fed to second-guessing from politicians, which he described as a "nightmare scenario." He contended that the politically independent Fed should not have Congress looking over its shoulder, allowing Fed officials to make decisions purely on economic data rather than political pressure.
A Paul spokesperson did not respond to a request for comment.