WASHINGTON, October 28, 2013 — Senator Rand Paul has already threatened to put a hold on the nomination of Janet Yellen, President Obama’s choice to replace Ben Bernanke at the helm of the Federal Reserve. The Kentucky Republican says he is willing to vote in favor of Yellen, but only if he gets a vote on a bi-partisan bill that he’s sponsored to put the Fed under greater congressional oversight and public scrutiny.
The White House initially expected to have 60 votes already set in the senate for Yellen’s nomination, with no political roadblocks. Some Democrats had expressed confidence in their ability to deliver the votes, especially now that newly elected New Jersey Senator Cory Booker has given them a 55-45 majority in the Senate. Only five Republican votes are needed to make Yellen the new Chair.
Paul has consistently tested the authority of federal agencies. He now claims that people deserve full information about what the Federal Reserve and other government agencies are doing.
Although Yellen is still expected to win confirmation, the process is now expected to be contentious. Many Republicans, not just Paul, have consistently criticized the central bank’s aggressive monetary policy and secretive behavior. They claim that the Fed is setting the country up for a round of inflation, and fear that the Fed is deliberately fueling the country’s debt.
In order for Yellen to make history as the nation’s first female Federal Reserve Chief, she has to play some politics of her own, laying the political groundwork before the Senate hearings. She’s reportedly set appointments to meet with key members of the Senate Banking Committee ― key Republicans like Senators Richard Shelby and Bob Corker ― in an attempt to build GOP support. Both men are expected to contest her nomination, but the weeks ahead could change their minds.
Paul’s legislation would open up the Fed to congressional auditors, a step that Federal Reserve officials believe could politicize the central bank’s independence. That leaves aside the question, has this secretive organization always acted in the best interests of the nation? No.
Perhaps more Congressional oversight is a step in the right direction. The Fed holds more power over the economy than Congress or the White House, which is why the Federal Reserve Transparency Act is even being considered. Nevertheless, politics still rules in Washington, and Republicans have threatened to block Obama’s pick regardless. The Yellen hearings will be one more heated battle in what has already been an unusually contentious year on Capitol Hill.
Janet Yellen’s political future could now be decided by Senator Paul, which could mean Congress will get the ability to audit the practices of the Federal Reserve. Although Paul’s decision could negatively impact her Senate confirmation, it further raises the initial concern from both Senate Democrats and House Republicans on re-shaping the Fed’s banking practices and re-stabilizing the country’s debt structure. If Paul’s wishes do come true, the United States could be on the brink of moving towards erasing the country’s debt — which hasn’t been done since President Andrew Jackson.
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