Nov. 1 (Bloomberg) -- Senator Rand Paul, a Republican from Kentucky, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that he expects Federal Reserve Vice Chairman Janet Yellen to win U.S. Senate confirmation to succeed Ben S. Bernanke as the central bank’s chairman.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the program with Senator Rand Paul of Kentucky. Senator, let’s start with NSA surveillance and the revelation that we listened in, among others, on Germany’s Angela Merkel’s private conversations. Is this just business as usual, as General Clapper says? And do you believe that President Obama didn’t know anything about it?
SENATOR RAND PAUL: It’s hard to believe he didn’t know. And my question is, are they tapping the president’s phone, also? He’s got a cellphone.
HUNT: The NSA or the Germans?
PAUL: Well, the NSA. I mean, think about it. And I say that a bit facetiously, but at the same time, the warrants that are coming out of the FISA court are so expansive and without limit and non-specific that they apply to all cellphones. So conceivably the NSA could be spying on the president’s phone.
HUNT: You think that’s conceivable?
PAUL: Well, I mean, I don’t - in a bulk way, yes, that he could be included. Now, I think he’s encrypted. He’s protecting himself from his own spy agency, because he’s got his phone encrypted. But do the rest of Americans have to get encrypted phones?
HUNT: There are also reports that the NSA spied on communication links of Yahoo and Google without telling them and there’s no law against that, but was that an overreach? And should Yahoo and Google be able to release all of the requests they get from NSA?
PAUL: The definition of overreach is everything the NSA has been doing over the last several years.
HUNT: So Yahoo and Google would -
PAUL: We’ve gone too far. We’ve gone too far. The president likes to say there’s a balance between liberty and privacy. Well - and government. We’ve gone overboard on every - in every venue. This needs to be reassessed.
And the most important question of all this to me and of any reform is this needs to be assessed, debated, and discussed in an open format before the Supreme Court. It totally goes against everything our country stands for to have a secret court, FISA, meets in - in secret. There are no two sides. The government presents evidence. There’s no one to present another point of view, and then to decide in secret if the Fourth Amendment applies -
HUNT: And would you like to see Google and Yahoo and others be able to release the requests they get?
PAUL: Absolutely. Absolutely.
HUNT: They should?
PAUL: But you know what I would also do? And they may not like this so much, is the Patriot Act took away liability protection or gave them liability protection. My privacy agreement with any of these Internet companies is only so good as they believe that I could sue them over it. If I can’t sue them over it, my privacy agreement means nothing.
HUNT: So release information, but take away liability?
HUNT: Let’s turn to the Fed. You have said that you want to hold up the nomination of Janet Yellen until you get a vote on your Fed audit bill. Harry Reid says he has the votes to get Yellen passed now. Does he? And what kind of support do you have? How long can you hold her up? Will you filibuster?
PAUL: Well, here’s the whole thing. The audit the Fed bill passed in the House after 20 years of my dad agitating on this, every Republican and 100 Democrats, overwhelmingly bipartisan transparency bill. Apparently, Janet Yellen’s been in favor of transparency at the Fed. That’s all we’re asking for, is an open audit a year after the fact.
I think that there are a lot of people in middle-class America with - some want to call flyover America where I live who are concerned about the revolving door from the Treasury to Wall Street firms to the Federal Reserve, and our concern is, are any of these manipulations of money and money being distributed helping people personally?
HUNT: Let’s -
PAUL: Are people becoming wealthy off of policy that we should know about?
HUNT: I want to ask you one more question about that, but how about Yellen, per se? Will that nomination be approved this year? Will you be able to hold it up? Will you filibuster it?
PAUL: In the old days, you could place a hold on and keep it forever. Even if I stand on the floor and filibuster in a personal fashion, I can only hold it there for two days.
HUNT: So she’s going to be confirmed?
PAUL: In all likelihood, yes. But I want to draw attention to the fact that audit the Fed has been held hostage by Senator Reid for three years. And once upon a time, he was for audit the Fed. We had floor speeches all through the ’90s, he would come down here with Senator Dorgan, and they were for auditing the Fed. My question is, let us have at least a vote on this.
HUNT: Some people say that if you take away any independence from the Fed, which an audit would do, that it goes to Congress, and that that means the party in power can influence pressure to the central bank to adopt policies to their political liking.
PAUL: If they’re not doing anything untoward, there should be no reason why we couldn’t look at it. This doesn’t affect any Fed power to look back over a year’s period of time. I think it’s the very least we can do. The Federal Reserve is a creation of Congress. They are under our jurisdiction. Right now, we’re going the opposite way in all of government. The biggest problem - if I could name one problem in all of government, it’s giving power to agencies that are not directly responsive, either bureaucracies or the Federal Reserve. Like, Dodd-Frank created a whole new agency that’s no longer responsive to the -
HUNT: If you got a vote on the Senate floor, if you actually got a vote, do you think you could secure 51 votes?
PAUL: I don’t know that we can win - sometimes they play a game, they don’t let you win with 51. You’ve got to have 60.
HUNT: That’s right. That’s right.
PAUL: It’s unlikely to have 60. We have 25 co-sponsors. We’ve been as high as 37. We have one Democrat co-sponsor, so there’s not a great groundswell on their side. But I think if you ask the American people, I think it’s an issue that 70 percent of the American people don’t think it’s right for a guy to come out of the Treasury and make $160 million on Wall Street the very next year and then go back into Treasury the next year. This revolving door, we should at least know what the policy is and whether anybody’s getting rich off of that policy.
HUNT: Let me ask you a couple political questions. There are a number of conservative groups, Jim DeMint’s group, the Senate Conservative Fund, the Club for Growth, that are supporting challengers to incumbent Republican senators, Kansas, Mississippi, even Kentucky, where you’re backing Mitch McConnell. Is this helpful or hurtful for the Republican Party?
PAUL: I’m a big believer in the free market. That means competition’s good. It makes us all better through competition. Now, am I supporting any of the challengers against incumbents? No. But is competition good? Yeah, it makes us hone our message better, makes us present it better. Without competition, we’d look more like one-party rule and -
HUNT: So it’s helpful, then?
PAUL: I don’t think it hurts debate. Discussion is good.
HUNT: You and Senator Ted Cruz, both first-term senators, both staunch conservatives, both have attracted national attention, how are you different philosophically or temperamentally?
PAUL: You know, I don’t know if I have an answer to that. We are friends, you know. We probably vote together a large portion of the time. Everybody’s different individually, but I think it’s sort of presumptuous of an individual to say, “Oh, well, I’m different in personality.” And that’s more for someone to judge, rather than me to describe, I think.
HUNT: How about January, when we hit the next continuing resolution? Will there be another shutdown?
PAUL: I don’t think so, but I think - what I tell people at home is, there’s a conundrum. Nobody at home - and I mean nobody - thinks that we should raise the debt ceiling without conditions. But they also aren’t real excited about going through deadlines. They’re not excited about shutdowns, either. It is a conundrum. But if we do nothing, and the president says he won’t negotiate, he won’t compromise, we just keep adding and adding more debt -
HUNT: So there will be some conditions, then -
PAUL: There has to be. There has to be conditions. And in 2011 -
HUNT: Do you have a prime condition or two you’d like to add to the debt?
PAUL: Well, in 2011, we did a sequester, a small percentage on just the discretionary spending. Do that on mandatory, and I might retire. If you put a 1 percent cut in mandatory spending for 10 years -
HUNT: You don’t think you could get that through the Senate, though, do you?
PAUL: If you - if you would, I could back to practicing medicine, because you would fix the country. The largest problem we have is the imbalance of payments. And it really is why we’re struggling as an economic - as an economy.
HUNT: Can I ask you a final parochial question? You’re supporting Mitch McConnell in Kentucky in his primary campaign. His opponent, Matt Bevin, says he was with you in your suite on Election Night 2010. McConnell’s camp says, no, he wasn’t. Was he? Do you remember him being there?
PAUL: You know, it’s one of those things where you have to testify in court a few years later and you have to swear on a Bible.
PAUL: I couldn’t swear on a Bible, but I’m also not going to say he wasn’t there. There’s a very good - if he says he was there, he probably was. But it was crazy. It was a really exciting time there. I won, and there were hundreds of people everywhere, and we were jubilant, and celebrating so I can’t tell you everybody who was there. But I can tell you, he was a supporter of mine. He donated to me, and I met on several occasions. I think he’s a good man. And I’m not going to say anything bad about him.
I made a decision. Everybody else has to make their decision. I’m one vote in Kentucky. And - but competition’s good. So I think it makes us all better.
HUNT: Senator Rand Paul, thank you so much for being with us today.
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