Janet Yellen Faces Hopeful Senate Math in Possible Federal Reserve Chair Bid
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There is no such thing as an easy vote in the current U.S. Senate, but Janet Yellen should have a relatively smooth path to confirmation if she is nominated by President Barack Obama to head the Federal Reserve.
Obama is expected to announce his decision in coming weeks and a White House official has said Yellen, 67, the Fed’s vice chair, is the leading choice to succeed Fed Chairman Ben Bernanke when his term expires in January.
With his Democratic Party controlling 54 votes in the 100-seat Senate, Obama would need just six Republicans to overcome any procedural hurdles and secure her historic appointment as the first woman chief of the U.S. central bank.
In bitterly partisan Washington, even those votes must be counted carefully, although strategists think Obama can rely on a core of moderate Republicans not to block her nomination. But Yellen should be prepared for some tough questions.
“It will be a robust hearing,” said Tony Fratto, a White House official under Republican President George W. Bush.
“But at the end of the day, even if there are differences of opinion with Yellen’s likely monetary policy direction, I think the Senate will be very comfortable with her, having confirmed her already once before,” he said, referring to her confirmation as the Fed’s No. 2 in September 2010.
The Senate Banking Committee initially vets the president’s nomination before sending it to the full Senate for a vote.
Republicans have sharply criticized the Fed’s ultra-easy monetary policy under Bernanke, warning it could spur asset bubbles and future inflation.
QE IN THE DOCK
Yellen staunchly supported the aggressive measures Bernanke has championed, including three massive bond buying campaigns, also called quantitative easing.
But Republicans hold just 10 of the banking committee’s 22 seats, which virtually assures her nomination would go before the full Senate for final consideration. Indeed, support from all the panel’s 12 Democrats would be expected.
An announcement from Obama on his Fed choice could come as early as next week, although political fighting over a deal to keep funding the U.S. government into the new fiscal year that starts on Tuesday could keep the White House preoccupied.
If the nomination does not come next week, it might not come until the middle of the month, given that Obama departs Washington on a weeklong tour of Asia on Oct. 6.
Once nominated, economists at Goldman Sachs expect that the committee would vote on Yellen in November or December, with the full Senate following in January. Bernanke’s term expires on Jan. 31. When he replaced Alan Greenspan in 2004, the Senate vote took place on Greenspan’s final day in office.
In the past, getting the needed votes in the full Senate would have been a cinch. Senators used to view the Fed as way too important to be used as a political punching bag.
That was then. Obama has faced implacable hostility from Republican lawmakers since his 2008 election, including a threat this week to trigger a government shutdown in a bid to defund the 2010 U.S. healthcare reform legislation.
RESPONSIBLE CORE
Even in such a charged political atmosphere, however, the White House should be able to garner enough Republican support for Yellen to meet the 60-vote threshold needed to clear procedural hurdles.
“I think 10 to 15 is a reasonable minimum estimate of the number of Republicans who will behave according to a pre-polarization definition of responsibility,” said William Galston, senior fellow at the Brookings Institution in Washington.
Yellen’s nomination as vice chair in 2010 advanced from the committee on a 17-6 vote. All the “no” votes were from Republicans, and four of those senators remain in the Senate and on the banking panel: Bob Corker of Tennessee, Richard Shelby of Alabama, David Vitter of Louisiana and Mike Crapo of Idaho.
Her subsequent Senate confirmation was by voice vote, so there is no record of who voted or how.
One hint of what may lie ahead comes in the roll call for Bernanke’s renomination earlier in 2010. Twenty-two Republicans were among the 70 senators who voted for Bernanke. Of those, 15 remain on Capitol Hill.
“A majority of Republicans probably will oppose Yellen, but with every Democrat voting for her, I’d expect her to get around 65 votes, maybe 70 (votes),” said Greg Valliere, a political strategist with Potomac Research in Washington.
The fact that Yellen would be the first woman to lead the U.S. central bank also weighs in her favor. Senators that seek to block her appointment would risk alienating women voters in the 2014 congressional elections.
Republicans may not want to further antagonize this constituency after losing support among women in the 2012 election.
Twenty Democrats and 13 Republicans senators are up for re-election next year, plus one independent.
“Although she would be nominated and confirmed because she is highly qualified, I do think there are a number of Republicans who would not want to stand in the way of what would be a historic nomination,” said Fratto, who is now a partner with Hamilton Place Strategies in Washington.
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