President Obama never had an easy path to winning confirmation for the next head of the Federal Reserve. But he’s decided to make it all the more difficult by introducing Janet Yellen at a time when congressional ire has hit new heights — and his opponents are already touting plans to make the nominee’s life difficult.
Obama is reportedly planning to send Yellen’s name to the Senate Wednesday, asking the chamber to confirm her as the next head of the world’s most powerful central bank.
More than most nominees, the pick for Fed director has traditionally been the prerogative of the president, as senators have been reticent to risk the market turmoil that could result from a prolonged battle over the bank’s leader. But at a time when Republicans have demonstrated their willingness to use any and all means available to leverage policy concessions, there’s no reason to believe that that precedent will be enough to usher Yellen through an easy confirmation.
Indeed, Sen. Ted Cruz, R-Texas, has already said he’ll use the nomination to look for leverage to pass legislation requiring a deeper audit of the Federal Reserve, a long-time dream of former Rep. Ron Paul, another Republican from Texas, that has become a mainstream goal of the modern GOP.
“That gives the opportunity to leverage,” Cruz said this summer when asked about Obama’s upcoming Fed nominee. “I certainly hope that, working together, we could force a vote on the Audit the Fed bill.”
Yellen’s nomination also comes at the nadir of relations between Republicans and the Federal Reserve. Chairman Ben Bernanke was first picked by former President George W. Bush, but his efforts to shock the economy into a stronger recovery have stretched his ties with Republicans well beyond their breaking point.
Conservative critics argue Bernanke’s hyperactive bank has put the country at risk of investment bubbles and inflation shocks while providing limited return in terms of economic growth. And with the rise of the Tea Party, Bernanke’s visits to the Hill have grown more contentious. At a July hearing in the House, Bernanke begged the House Financial Services Committee Republicans to avoid drama over the debt limit, only to be told by a pair of legislators that he was overstepping his bounds.
Yellen is now being thrown into the middle of that debate, and there’s no indication she plans to move the bank in a direction that will garner GOP approval. Yellen is viewed as — if anything — more aggressive than Bernanke in her monetary policy, and she has staunchly defended the Fed’s efforts to use easy money to fight unemployment.
As with all nomination fights, the most likely outcome is that the Senate will eventually confirm Yellen to to head the Fed, handing her Bernanke’s place when his term expires in 2014. But given the current political climate, her path will be neither quick nor painless.
What We're Following See More »
President Trump’s portrayal of an effort to funnel more Medicaid dollars to Puerto Rico as a "bailout" is complicating negotiations over a continuing resolution on the budget. "House Democrats are now requiring such assistance as a condition for supporting the continuing resolution," a position that the GOP leadership is amenable to. "But Mr. Trump’s apparent skepticism aligns him with conservative House Republicans inclined to view its request as a bailout, leaving the deal a narrow path to passage in Congress."
Facebook "outlined new measures it is taking to combat what it calls 'information operations' that go well beyond the phenomenon known as fake news" on Thursday. Facebook acknowledged that there are governments using its platform as a tool to launch propaganda information campaigns and "manipulate public opinion in other countries. ... Facebook suspended 30,000 accounts in France ahead of last Sunday’s first-round presidential election."
Democrats in the House are threatening to shut down the government if Republicans expedite a vote on a bill to repeal and replace Obamacare, said Democratic House Whip Steny Hoyer Thursday. Lawmakers have introduced a one-week spending bill to give themselves an extra week to reach a long-term funding deal, which seemed poised to pass easily. However, the White House is pressuring House Republicans to take a vote on their Obamacare replacement Friday to give Trump a legislative victory, though it is still not clear that they have the necessary votes to pass the health care bill. This could go down to the wire.
Members of Congress are eyeing a one-week spending bill which would keep the government open past the Friday night deadline, giving lawmakers an extra week to iron out a long-term deal to fund the government. Without any action, the government would run out of funding starting at midnight Saturday. “I am optimistic that a final funding package will be completed soon," said Rep. Rodney Frelinghuysen, R-N.J., chairman of the House Appropriations Committee.