Janet Yellen’s nomination to be chairman of the Federal Reserve won support from the Senate Banking Committee today in a 14-8 vote, moving her bid to be the Fed’s first female head to the Senate for confirmation.
Yellen was backed by 11 of the 12 Democrats on the banking committee, and three of the panel’s Republicans. Republican Senators Mark Kirk of Illinois, Bob Corker of Tennessee and Tom Coburn of Oklahoma supported her. Joe Manchin of West Virginia was the only Democrat to vote against her.
Her nomination now moves to the full Senate, where a rule change today will allow her to be confirmed with a majority of votes.
“As we saw in her testimony last week, Dr. Yellen understands the challenges facing our economy and the balance the Fed must strike as we navigate the path back to full employment,” said Senator Tim Johnson, the South Dakota Democrat who chairs the banking committee.
Yellen, a main architect of the Fed stimulus’s programs, indicated in her Nov. 14 confirmation hearing that she’ll press on with accommodation until she sees a robust recovery. She downplayed risks that stimulus is inflating asset price bubbles, saying she doesn’t see “bubble-like conditions” in stock prices.
The nomination advances to the Senate, where Majority Leader Harry Reid approved a rule change allowing nominees for posts in the executive and judicial branches to be confirmed with a majority vote. The move effectively ends the requirement that at least 60 votes are needed in the Senate to advance nominations, except for the U.S. Supreme Court.
Six Senate Republicans had signaled their support for Yellen to succeed Ben S. Bernanke, which would have given her as many as 60 votes, enough to clear the Senate even without the rule change. Manchin is the only of the chamber’s 55 senators allied with Democrats who has signaled opposition to Yellen.
“Dr. Yellen is a very intelligent and capable nominee, but her views and beliefs to continue quantitative easing, despite a failure to see any real gains, greatly troubles me,” Manchin said in a statement, referring to the Fed’s monthly bond purchases totaling $85 billion.
In addition to Corker, Kirk and Coburn, Republicans Susan Collins of Maine, Lindsey Graham of South Carolina and Orrin Hatch of Utah said in interviews this week that they were inclined to back Yellen when the nomination comes to the Senate floor, which may occur the week of Dec. 9.
Senators touted Yellen’s qualifications for the job. The former University of California at Berkeley professor was a Fed governor from 1994 to 1997, chairman of the Council of Economic Advisers from 1997 to 1999, San Francisco Fed President from 2004 to 2010 and vice chairman of the Fed since 2010.
“She’s extraordinarily well qualified,” said Elizabeth Warren, a Democrat from Massachusetts on the banking panel. “She comes to the Fed with really the best credentials we’ve ever seen for someone at the Fed.”
“In the end, I do believe she has the qualifications necessary to be the Fed chairman and plan to support her nomination,” Corker said in a news release.
“She’s obviously qualified,” Coburn said in a Nov. 19 interview when asked if he would back her nomination. “I don’t agree with a lot of her philosophy, but she’s qualified.”
“She seems to be a qualified lady,” Graham said of Yellen, 67. He said he’s “inclined to support her” when asked about his position on her nomination.
Collins said she was “certainly inclined to support” Yellen, adding, “I believe that she’s well qualified for the position.”
Corker, a member of the banking panel, met with Yellen Nov. 18. He said yesterday she made a commitment to moderate Fed purchases of mortgage bonds as soon as she thinks “the data supports that action and shows that the current status cannot continue.”
The Federal Open Market Committee began $40 billion in monthly purchases of mortgage-backed securities in September 2012. Republicans have opposed the bond-buying pace that has swelled the Fed’s balance sheet to almost $4 trillion.
Corker said he’s concerned that Yellen lacks the experience in systemic financial regulation and hopes she works to overcome “that deficit.”
Senator Mike Crapo of Idaho, the senior Republican on the banking committee, said he opposed Yellen because of her support for the Fed’s monetary stimulus programs.
“The long-term costs of these policies are unclear and, frankly, worrisome,” Crapo said. “The immediate benefits are questionable and markets have become too reliant on monetary stimulus.”
Nebraska Senator Mike Johanns, a Republican member of the banking panel, announced yesterday that he would oppose Yellen. While he said he didn’t find her lacking in qualifications, he’s concerned the Fed’s “policies of indefinite stimulus will have negative long-term economic consequences.”
“I cannot support Ms. Yellen’s nomination because, given many opportunities, she never did distance herself from these easy-money policies,” Johanns said. “The Fed has gone too far in trying to stimulate the economy and these sweeteners can’t go on forever. While the market has enjoyed this sugar high, it is unsustainable.”
Rand Paul of Kentucky, Richard Shelby of Alabama, Pat Toomey of Pennsylvania, John Hoeven of North Dakota, John McCain of Arizona, David Vitter of Louisiana and Pat Roberts of Kansas are among other Senate Republicans who have said they probably or definitely will vote against Yellen’s confirmation.
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