Yellen’s nomination as Fed chairman approved by Senate panel

Source: Bloomberg Source: Bloomberg

Janet Yellen’s nomination to be chairman of the Federal Reserve was approved by the Senate Banking Committee today with a vote of 14-8.

Yellen was approved 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.

“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.

Six Senate Republicans have signaled their support for Yellen to succeed Ben S. Bernanke as chairman of the Federal Reserve, which should give her the 60 votes she needs to be confirmed by the full Senate.

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.

“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.

Manchin is the only of the chamber’s 55 Democrats who has signaled opposition to Yellen. That means support from at least six Republicans should thwart opponents’ attempts to block her confirmation.

‘Don’t Agree’

“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.” Coburn is a member of the banking panel.

“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.

Lacks Experience

Corker said he’s concerned that Yellen lacks the experience in systemic financial regulation and hopes she works to overcome “that deficit.”

Nebraska Senator Mike Johanns, a Republican member of the banking panel, announced yesterday that he would oppose Yellen. He said he didn’t find her lacking in qualifications, though he’s 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.”

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.

At least two Republican senators -- Kelly Ayotte of New Hampshire and Lisa Murkowski of Alaska -- said they hadn’t made up their minds about Yellen and didn’t rule out supporting her.

www.bloomberg.com

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