Senate panel approves Yellen for Fed chief

The Senate Banking Committee on Thursday approved the nomination of Janet Yellen to take over the Federal Reserve.

Yellen was approved in a vote of 14 to 8, garnering the support of 11 of the panel’s 12 Democrats, as well as three Republicans: Sens. Bob CorkerRobert (Bob) Phillips CorkerOPINION: Congress should censure Trump for his unfit conduct How to fix Fannie and Freddie to give Americans affordable housing No. 2 Senate Republican backs McConnell in Trump fight MORE (Tenn.), Tom CoburnTom CoburnAl Franken: 'I make fun of the people who deserved it' The more complex the tax code, the more the wealthy benefit Congress, stop using our nation's military policy for political purposes MORE (Okla.) and Mark KirkMark KirkImmigration critics find their champion in Trump Trump's nominee to lead USAID has the right philosophy on international aid McConnell: Senate to try to repeal ObamaCare next week MORE (Ill.).

The remaining seven Republicans on the panel opposed the nomination, as did Sen. Joe ManchinJoe ManchinOPINION | 5 ways Democrats can win back power in the states Trump's Democratic tax dilemma Manchin eyed as potential pick for Energy secretary: report MORE (D-W.Va.).

The bipartisan vote indicates that Yellen should face little trouble receiving full confirmation by the Senate. If confirmed, Yellen would take over for current Fed Chairman Ben Bernanke and become the first female head of the world’s leading economic institution.

ADVERTISEMENT
However, the relatively strong GOP resistance to the pick, even among members who acknowledge her qualifications, suggests Yellen could set a new low in terms of Senate support for a Fed nominee. Bernanke received only 70 votes for his second term in 2010, the lowest rate of support ever for a Fed chairman.

Debate over the central bank has grown more partisan since then, as several high-profile Republicans, like Sen. Rand PaulRand PaulCurtis wins GOP primary for House seat vacated by Jason Chaffetz Glimmer of hope in bipartisan criminal justice reform effort Trump barrage stuns McConnell and his allies MORE (R-Ky.), have assailed the central bank’s policies.

Manchin surprised many when he cast a vote opposing Yellen, separating him from his Senate Democratic colleagues. He did not offer an immediate explanation for the vote, although he did tell Yellen during her confirmation hearing that they disagreed on policy.

The vote to back Yellen, the current vice chairwoman of the Fed, came exactly one week after she testified before the banking panel on her nomination. Chairman Tim JohnsonTim JohnsonCourt ruling could be game changer for Dems in Nevada Bank lobbyists counting down to Shelby’s exit Former GOP senator endorses Clinton after Orlando shooting MORE (D-S.D.) called her a "model candidate" to lead the Fed.

At her hearing, Yellen faced little challenge from Republicans on her experience or qualifications, although several aired their concerns about the Fed’s stimulus policies.

Before Thursday’s vote, Sen. Mike CrapoMike CrapoYou're fired! Why it's time to ditch the Fed's community banker seat GOP debates tax cuts vs. tax reform Conservative groups urge Trump to stick with Ex-Im Bank nominee MORE (R-Idaho), the ranking Republican on the panel, again blasted the Fed’s policies, which he said were “frankly worrisome.”

The central bank is buying up billions of dollars of bonds each month in an effort to further support the economy, and Yellen has consistently backed that approach.

GOP lawmakers argue the policy is ineffective and risky, and say the Fed should pull back.

During her hearing, Yellen defended the stimulus, saying it was needed to fuel the economy after the recession. But she also acknowledged that the policy was unsustainable and not appropriate for more regular economic conditions.

Thursday’s vote made clear that while some Republicans have concerns about Yellen’s reputation as a “dove” supportive of more aggressive efforts to tackle unemployment, many did not see that policy difference as a reason to oppose her.

Yellen received nearly unanimous support from the panel’s Democrats, including several who took the rare step of openly advocating for her nomination before President Obama had made a selection. Several Senate Democrats had signed on to a letter this summer calling on the president to pick Yellen, amid reports that the president was favoring his former economic adviser, Lawrence Summers.

Facing resistance in his own party to his nomination, Summers eventually withdrew his name from consideration, clearing the way for Yellen to be picked in October.

Sens. Elizabeth WarrenElizabeth WarrenWarren: Education Dept lawyer may have violated conflict-of-interest laws Congress should think twice on the Israel Anti-Boycott Act Sanders plans to introduce single-payer bill in September MORE (D-Mass.) and Heidi HeitkampHeidi HeitkampTrump's Democratic tax dilemma It's time for McConnell to fight with Trump instead of against him The real litmus test is whether pro-life democrats vote for pro-life legislation MORE (D-N.D.) said they were delighted to see the first woman take a step closer to taking over the Fed.

Warren sharply criticized Paul’s threat to hold up Yellen’s nomination by demanding a vote on his legislation to fully audit the Fed first, calling it “one more example of abuse of the filibuster.”

“His problem is not with Janet Yellen and with her policies generally. He wants a protest to just stop the process of considering people going forward,” Warren said.

If confirmed, Yellen would take control of the Fed in January, after Bernanke’s term expires. She would enter the Fed at a crucial time, as officials there are discussing the appropriate time to begin slowing its stimulus efforts. Many observers think that process could begin in the spring.

— This story was updated at 11:32 a.m.