Janet Yellen, nominated by the White House to replace Ben Bernanke as Federal Reserve chair, passed a key hurdle Thursday when the Senate Banking Committee voted in favour of her. Three Republicans joined 11 committee Democrats in the 14-8 vote for Yellen, raising the likelihood that her nomination will surmount any procedural challenges when it comes before the full Senate, expected in the next two weeks.
Democratic Senator Elizabeth Warren, seen as a key monetary and fiscal policy watchdog in Congress, hailed Yellen as an "extraordinarily qualified woman" for the post and expressed surprise that eight on the committee had voted against her.
"Janet Yellen has impeccable credentials, and I'm very pleased she was voted out of committee with bipartisan backing," said Warren. "I hope the Senate will act swiftly to confirm her so she can get to work leading the Fed at this important time."
If approved, Yellen, currently the Fed's vice chair, would become the first woman to lead the world's most powerful central bank. At 67, Yellen has built a strong reputation as an academic economist, teaching at the University of California at Berkeley, and a veteran of the central bank. Married to economics Nobel Prize winner George Akerlof, she has a long-term interest in the impact of joblessness on the economy, and has helped keep Fed policy focused on bringing down the unemployment rate. In a confirmation hearing at the banking committee last week, she made clear she would not break from the stimulus policies put in place by Bernanke to get the US economy into higher gear in the wake of the 2008-2009 recession.
President Barack Obama's pick to replace Bernanke, who ends eight years in the job on January 31, breezed through the hearing. But a number of Republican senators raised questions about the risks of the Fed's ultra-low interest rate and the multi-trillion dollar pile of assets it has piled up as a result of its ongoing quantitative easing stimulus program.
Michael Crapo, the committee's top Republican, said he voted against Yellen because of her support for the stimulus, now purchasing assets at a pace of $85 billion a month. "The long-term costs of these policies are unclear and worrisome," he said. One Democrat on the committee, Joe Manchin, also voted against Yellen, which other members said was not directed at Yellen herself but at the Fed's easy-money policy.
The committee vote raised the likelihood that the full Senate will back her to lead the central bank. Some Republicans, including Fed critic Rand Paul, have threatened to stall the nomination by parliamentary tactics. To overcome that, the majority Democrats in the Senate would have to get at least five Republicans on their side.
As of Thursday, at least five had signalled their support. Republican committee member Bob Corker said he "would prefer to see someone who held a more modest view regarding the limits of monetary policy on our economy." Nevertheless, he said, he found her fully qualified and would support her.
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