(c) 2013, Bloomberg News.
(c) 2013, Bloomberg News.
WASHINGTON — Senate Republicans are raising questions about Federal Reserve Chairman nominee Janet Yellen's views on monetary policy, even as they predict she probably will be confirmed.
Several Republicans on the Senate Banking Committee, which will consider Yellen's nomination before a floor vote to confirm her is scheduled, said Wednesday that their concerns about the Federal Reserve's bond-buying program -- known as quantitative easing -- could cause them to vote against confirming Yellen.
"I still have the same concerns," said Idaho Sen. Mike Crapo, the top Republican on the banking panel, who opposed Yellen's nomination to the Federal Reserve Board in 2010. "We are now moving toward further Fed management of some sort with regard to whether it's winding down the quantitative easing or not, but I'm going to let the process move forward and evaluate it carefully before I make a decision."
President Obama Wednesday nominated Yellen, the Fed's current vice chairman, to lead the central bank, replacing Ben Bernanke.
Even if they end up opposing her, Republicans on the panel couldn't unilaterally block Yellen because Democrats have a two- seat edge on the committee. On the Senate floor, Democrats would need the support of six Republicans to advance Yellen's nomination.
Obama turned to Yellen, 67, after Lawrence Summers, a former Treasury secretary and one-time economic adviser to the president, withdrew from consideration amid complaints from Democrats on the banking panel.
Democrats have hailed the selection of Yellen, who would become the first woman to lead the Fed.
"She's terrific, a brilliant economist, someone who's great experience as a bank president of the Federal Reserve of San Francisco, as a member of the board of governors, someone who understands not only the theory but over the last several years the real nuts and bolts of trying to run the Federal Reserve," Sen. Jack Reed, D-R.I., who sits on the banking panel, said Wednesday in an interview at the Capitol.
Republicans, meanwhile, are skeptical, primarily because as a top deputy to Bernanke, Yellen supported the central bank's unprecedented bond-buying programs and was behind a strategy adopted in 2012 to commit the central bank to goals on inflation and unemployment.
Sen. Bob Corker, R-Tenn., criticized Yellen's "dovish" views on monetary policy.
"In this case, I think almost the 100 percent focus is going to be monetary policy, at least among those who are going to look at this objectively," Corker told reporters Wednesday at the Capitol. "There are people who are automatic yeses."
U.S. central bankers in December increased their bond purchases to an $85 billion monthly pace while tying changes in the benchmark lending rate to thresholds for unemployment and inflation.
"My biggest question to Ms. Yellen will be will she actively push for higher capital requirements for mega-banks than regulators have announced," said David Vitter, R-La., a member of the banking panel, adding he worried she would "continue the Fed's excessive printing of money."
Alabama Sen. Richard Shelby, formerly the top Republican on the banking committee, "has real concerns" about Yellen's "proclivity to print more money and her record as a bank regulator," said Shelby spokesman Jonathan Graffeo.
"However, he believes that we should let the confirmation process play out, and looks forward to discussing her record at the upcoming hearing," Graffeo said.
Before a hearing is scheduled on Yellen's nomination, she will be vetted by Republican and Democratic committee staffers and will meet privately with most, if not all, senators on the banking panel. That process typically takes several weeks and could be longer in this case because of furloughs necessitated by the government shutdown that is now in its second week.
Crapo, Shelby, Corker, and Vitter opposed Yellen's nomination to the Fed board and to be the central bank's vice chairman in 2010. All except Corker were among the 30 senators — 18 Republicans and 12 Democrats — who opposed Bernanke's nomination to a second term as Fed chairman in 2010.
Summers, 58, withdrew his name from consideration last month after reports that he was the front-runner for the post. Twenty Senate Democrats took the unusual step of signing a July 26 letter urging Obama to nominate Yellen.
Although the senators' pro-Yellen letter didn't mention Summers by name, several signers later said they would oppose his nomination. They cited his efforts to deregulate the financial industry while serving in President Bill Clinton's administration, a move that some lawmakers said contributed to the 2008 financial crisis.
At least five Democrats on the Senate banking panel said they would oppose Summers in the days before he bowed out of consideration. That would have been enough to scuttle his nomination in the committee if he were chosen.
Sen. Mike Johanns, R-Neb., a member of the banking panel who backed Yellen for vice chairman three years ago, said he was eager to learn more about her, though he wasn't aware of any reasons his support would change.
"That's why I'm saying I'm open but I haven't committed to being a yes vote yet," Johanns said.
Another banking committee Republican open to supporting Yellen is Tom Coburn, R-Okla.
"I'm going to sit down and talk with her, visit with her," Coburn said in an interview at the Capitol. "I'm glad the president nominated someone, and now we can get the process moving."