Nebraska Senator Mike Johanns, a Republican member of the banking panel, announced today that he would oppose Yellen. He said he didn’t find her lacking in qualifications, yet he was concerned that 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.”
Kentucky’s Rand Paul, Alabama’s Richard Shelby, Pennsylvania’s Pat Toomey, North Dakota’s John Hoeven, Arizona’s John McCain and Kansas’s Pat Roberts are among other Senate Republicans who have said they probably or definitely will vote against Yellen’s confirmation.
At least two Republican senators -- Kelly Ayotte of New Hampshire and Lisa Murkowski of Alaska -- said yesterday that they hadn’t made up their minds about Yellen and didn’t rule out supporting her.
Yellen faces opposition from some Republicans who, like Johanns, disapprove of the Fed’s recent monetary policy. Fed officials have said their current pace of bond purchases will continue until the labor market improves substantially.
In a letter to Republican Senator David Vitter of Louisiana, Yellen defended the central bank’s bond purchases, saying they boosted economic growth and provided benefits that exceed the risks.
“By putting downward pressure on longer-term interest rates and helping to make financial conditions more accommodative, the Federal Reserve’s asset purchases have supported a stronger economic recovery, improved labor-market conditions and helped keep inflation closer to its 2% objective,” she said in a Nov. 18 response to questions from Vitter, a member of the banking panel who has said he’ll vote against the nomination.
Paul said he will oppose Yellen’s nomination unless he receives consideration of his measure requiring a public audit of the Federal Reserve.
In two hours of testimony before the banking panel last week, Yellen indicated she’ll press on with the Federal Reserve’s unprecedented monetary stimulus until she sees a robust recovery. Yellen signaled her determination to use bond buying to strengthen the economy and lower the 7.3% U.S. unemployment rate.