The Senate voted 56-26 on Monday to confirm Janet Yellen as the next chair of the Federal Reserve, elevating her to arguably the most powerful woman in Washington. It won’t be an easy job.
In addition to overseeing the unwinding of the central bank’s bond-buying program and likely its first interest-rate hike since December 2008, Yellen will inherit the Fed chairman’s twice-yearly grilling by members of Congress. The Fed chief is required by law to provide semiannual updates on monetary policy to the Senate Banking and House Financial Services committees.
It won’t always be pleasant, but Yellen’s job might be slightly easier than that of her predecessor, Ben Bernanke. Not only is the economy slowly improving but the Fed is also easing off a bond-buying program known as “quantitative easing” that has drawn criticism from a number of congressional Republicans, who say it could have unintended negative consequences for the economy.
“There’s always a tension between the Fed and the Congress, which is sort of a rightful tension, but I don’t think it’s going to be as intense,” said Stuart Hoffman, chief economist at the PNC Financial Services Group.
From Congress’s perspective, the Fed is trudging toward more normal policies, which should please the vocal critics on the right, even as it may draw fresh criticism from Democrats who think the central bank is backing off its support for the fledgling recovery too soon. From the Fed’s point of view, Congress just delivered more fiscal certainty — something Bernanke often urged it to do — with the passage of a modest two-year budget agreement last month.
But even though the Fed announced it would cut the total number of monthly asset purchases by $10 billion to $75 billion in December, the central bank will still be growing its balance sheet, which critics say could cause financial instability, through the bond-buying program in 2014. “I don’t think the pressure lessens up. I just think it changes a little bit the nature of the Republican criticism,” said Sarah Binder, a Congress expert at the Brookings Institution.
Some of the more politically contentious aspects of the Fed are, in addition to quantitative easing, its work as a financial regulator and its transparency. A bill that would open up the central bank’s monetary-policy decisions to congressional scrutiny has been the most prominent effort in recent years to change the Fed; it passed the House in 2012 but has so far failed to advance in the Senate.
“I would be very concerned about legislation that would subject the Federal Reserve to short-term political pressures that could interfere with [its] independence,” Yellen said at her confirmation hearing, echoing concerns that Bernanke raised during his tenure.
She may be forced, like Bernanke, to defend her position again.
The House Financial Services Committee announced last month that it would spend 2014 examining the Fed’s mission through a series of hearings and is prepared to mark up legislation to reform the Fed later next year. The first of 2014, scheduled for Thursday, will focus on the international impacts of the Fed’s bond-buying program.
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The national polls, once again, tell very different stories: Clinton leads by just one point in the IBD, Rasmussen, and LA Times tracking polls, while she shows a commanding 12 point lead in the ABC news poll and a smaller but sizable five point lead in the CNN poll. The Republican Remington Research Group released a slew of polls showing Trump up in Ohio, Nevada, and North Carolina, a tie in Florida, and Clinton leads in Pennsylvania, Wisconsin, and Virginia. However, an independent Siena poll shows Clinton up 7 in North Carolina, while a Monmouth poll shows Trump up one in Arizona
Since the release of the Access Hollywood tape, on which Donald Trump boasted of sexually assaulting women, "Senate Republicans have seen their fortunes dip, particularly in states like Florida, North Carolina, New Hampshire, Nevada and Pennsylvania," where Hillary Clinton now leads. Jennifer Duffy writes that she now expects Democrats to gain five to seven seats—enough to regain control of the chamber.
"Of the Senate seats in the Toss Up column, Trump only leads in Indiana and Missouri where both Republicans are running a few points behind him. ... History shows that races in the Toss Up column never split down the middle; one party tends to win the lion’s share of them."
"Some Republicans are running so far away from their party’s nominee that they are threatening to sue TV stations for running ads that suggest they support Donald Trump. Just two weeks before Election Day, five Republicans―Reps. Bob Dold (R-Ill.), Mike Coffman (R-Colo.), David Jolly (R-Fla.), John Katko (R-N.Y.) and Brian Fitzpatrick, a Pennsylvania Republican running for an open seat that’s currently occupied by his brother―contend that certain commercials paid for by the Democratic Congressional Campaign Committee provide false or misleading information by connecting them to the GOP nominee. Trump is so terrible, these Republicans are essentially arguing, that tying them to him amounts to defamation."
Former Illinois GOP Congressman Aaron Schock "recently agreed to pay a $10,000 fine for making an excessive solicitation for a super PAC that was active in his home state of Illinois four years ago." Schock resigned from Congress after a story about his Downton Abbey-themed congressional office raised questions about how he was using taxpayer dollars.