Federal Reserve policy makers have publicly debated whether to maintain their bond-buying pace since well before Janet Yellen was named last month to succeed Chairman Ben S. Bernanke. One voice has been missing: Yellen’s.
Tomorrow, she’ll express her views publicly for the first time in seven months on the record stimulus she’s supported and that some lawmakers are using to justify voting against her. Testifying to the Senate Banking Committee, Yellen will try to defend a policy that’s swelled the Fed’s balance sheet to almost $4 trillion while facing four Republicans who voted no on her 2010 bid to be vice chairman.
“I still have concerns, which were the concerns behind my original vote on her original nomination, about her support of the quantitative easing and the entire direction the bank has been going for the last few years,” Idaho Senator Mike Crapo, the senior Republican on the Banking Committee, said in an interview. Crapo, who voted against her in 2010, said he hasn’t committed to how he would vote this time.
While Crapo and other critics on the panel may not have enough allies to block her, they have ample ammunition to make the hearing contentious. The nation’s jobless rate has exceeded 7% for more than four years since the end of the longest recession since the Great Depression, even as the Fed presses on with an unprecedented program to keep interest rates low.
Democrats hold 12 seats on the Banking Committee, enough to send her full nomination to the Senate, even without Republican support. At least one Republican, Mike Johanns, a Nebraska lawmaker who supported Yellen in 2010, said he would probably renew his support “unless something were to come up.” No Democrat has voiced opposition to Yellen.
Yellen has “demonstrated that her experience in the Federal Reserve System and her position as the point person for monetary policy make her the most qualified person for this job,” Senator Sherrod Brown, an Ohio Democrat, said in a statement. Brown wrote a letter signed by 20 Democrats in support of Yellen before she had been nominated.
In 2010, Republican senators including Crapo, Alabama’s Richard Shelby, Louisiana’s David Vitter and Tennessee’s Bob Corker, all of whom remain on the banking panel, opposed her.
“I can’t envision a scenario where she’s blocked,” said Greg Valliere, chief political strategist for Potomac Research Group in Washington.