GOP promises ‘careful’ review of Yellen

Senate Republicans on Wednesday made it clear Janet Yellen’s confirmation as head of the Federal Reserve will be no cakewalk. [WATCH VIDEO]

While a handful of Republicans praised Yellen, who if confirmed would be the first woman to lead the Fed, others signaled opposition over her economic views, which some believe could lead to inflation.

ADVERTISEMENT
“I voted against Vice Chairman Yellen’s original nomination to the Fed in 2010 because of her dovish views on monetary policy,” Sen. Bob Corker (R-Tenn.), a member of the Senate Banking Committee, said in a statement.

“We will closely examine her record since that time, but I am not aware of anything that demonstrates her views have changed,” he added.

A spokesman for Sen. Richard Shelby (R-Ala.), who also serves on the Banking panel, said the lawmaker had “real concerns about her proclivity to print more money and her record as a bank regulator, which has been found wanting.”

Most think Yellen will continue the policies of Federal Reserve Chairman Ben Bernanke, which could mean a slow tapering off of the Fed’s stimulus for the economy.

Markets had hoped Yellen would get the nod and were mixed on Wednesday despite fears that the U.S. could miss a deadline next week for hiking the debt ceiling, causing a default on government payments.

Republican lawmakers, however, have been worried about some of Bernanke’s actions, and even a Republican who backed Yellen’s nomination to the Fed in 2010 held back on an endorsement Wednesday.

“I will pay careful attention to Ms. Yellen’s views on what role she believes the Fed should play as we continue working to strengthen our economy,” said Sen. Mike Johanns (R-Neb.), who backed Yellen in 2010. He noted that the economy is in a “different place” now.

Yellen was confirmed by a voice vote in 2010 to serve as the Fed’s vice chairwoman, and her nomination cleared the Banking panel by a vote of 17-6, garnering the support of four Republicans.

She is expected to win the approval of most Democrats in the Senate, many of whom were pleased Obama picked Yellen over former economic adviser Larry Summers. Yellen is expected to focus on the Fed’s role in lowering unemployment, a position that will help her with liberal lawmakers.

Yet it is possible she could lose a handful of votes from President Obama’s party.

Sen. Heidi Heitkamp (D-N.D.), who sits on the Banking Committee, said Wednesday she wants to consider the pick further before making a decision. And Sen. Bernie Sanders (I-Vt.), a liberal who caucuses with Democrats, indicated he would press Yellen on a number of fronts, particularly on financial regulation.

Senate Banking Committee Chairman Tim Johnson (D-S.D.) said he wants to move Yellen’s nomination in a “timely manner,” but no time frame for a confirmation hearing has yet been set, according to a committee spokesman.

In introducing Yellen on Wednesday, Obama hailed her as “exceptionally well-

qualified” for the job.

“She is a proven leader, and she’s tough. Not just because she’s from Brooklyn,” he said.

Since Yellen joined the Fed, it has ratcheted up its efforts to stimulate the economy, buying hundreds of billions of dollars in bonds in several rounds of “quantitative easing.” Those purchases are still underway, but experts expect the Fed to hit the brakes soon, leaving Yellen with the tough job of navigating the exit without driving down a market buoyed by the easy money policies.

Some Republicans who struck a favorable tone toward Yellen refrained from officially backing her on Wednesday.

Sen. Susan Collins (R-Maine) called her a “very experienced, qualified individual,” but added she needed to hear more from the nominee.

“I want to wait until I see her performance at her nomination hearing,” said Collins, who is leaning toward supporting Yellen. “You never know what may happen at a confirmation hearing.”

Sen. Orrin Hatch (R-Utah) called Yellen “impressive.”

“She’s been pretty accurate in her prognostications, which is impressive to me,” he told The Hill.

Jim Pethokoukis, a scholar with the American Enterprise Institute, said there would be a “huge temptation” for any Republicans eyeing a White House run to use Yellen’s nomination to climb onto an anti-Fed soapbox.

“Among the Tea Party and conservative Republicans, there is a very intense anti-Fed feeling,” he said. “It would be very difficult for anyone who plans to run for president to vote for Janet Yellen.”

He said he would discourage such en effort, however, because Yellen is qualified for the job and railing against a historic female pick would “look terrible.”

Likely suspects to mount an anti-Fed campaign over Yellen’s nomination include Sens. Ted Cruz (R-Texas) and Rand Paul (R-Ky.), whose father literally wrote the book on criticizing the Fed.

But so far, even those Fed firebrands are playing it cool.

“Sen. Paul looks forward to an in-depth discussion about the role and actions of the Federal Reserve while debating this nomination,” a Paul spokesman said.

“One issue at a time. Right now we need to fund vital government functions,” Cruz said when asked about Yellen.


Selim Koru contributed to this report. 



More in Senate

Schumer sides with GOP on reviewing Iran deal

Read more »