Senator Paul Predicts Yellen Will Win Confirmation as Fed Chief

Friday, 01 Nov 2013 07:39 AM

 

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Senator Rand Paul, a Kentucky Republican, predicted Federal Reserve Vice Chairman Janet Yellen will win U.S. Senate confirmation to succeed Ben S. Bernanke as central bank chairman.

Asked if Senate Majority Leader Harry Reid, a Nevada Democrat, has the votes to get Yellen confirmed, Paul said, “in all likelihood, yes.” He spoke in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.

Yellen began meeting with senators in preparation for a Nov. 14 nomination hearing by the Senate Banking Committee. She needs to win the panel’s approval before her nomination advances to the Senate for a confirmation vote. Bernanke’s term expires on Jan. 31.

“We had a nice meeting, a courteous meeting,” Senator Richard Shelby of Alabama, the banking panel’s No. 2 Republican, said after talking with Yellen, 67. He said he asked “a lot of questions about the role of the Fed,” and didn’t commit to supporting her nomination.

Paul, 50, has pledged to hold up the nomination until securing a vote on legislation requiring a public audit of the central bank, including decision-making on monetary policy.

“I want to draw attention to the fact that audit the Fed has been held hostage by Senator Reid for three years,” Paul said.

“Apparently Janet Yellen’s been in favor of transparency at the Fed,” he said. “That’s all we’re asking for is an open audit.”

NSA Spying

Paul also addressed allegations that U.S. intelligence efforts have included listening to phone conversations of foreign leaders such as German Chancellor Angela Merkel, saying the National Security Agency went too far.

“The definition of overreach is everything the NSA has been doing over the last several years,” Paul said.

It’s conceivable, though unlikely, the agency is tapping President Barack Obama’s phone, Paul said.

“I say that a bit facetiously, but at the same time, the warrants that are coming out of the FISA court are so expansive and without limit and non-specific that they apply to all cellphones,” Paul said, referring to the U.S. Foreign Intelligence Surveillance Act. “So conceivably the NSA could be spying on the president’s phone.”

Tea Party

On the struggle within his Republican Party, where emboldened Tea Party activists are seeking to oust senators who voted to end a 16-day partial federal government shutdown this month, Paul said the competition among candidates is good.

At least seven Republican senators are facing primary challengers in the 2014 midterm elections, including Senate Minority Leader Mitch McConnell of Kentucky, Lindsey Graham of South Carolina, Thad Cochran of Mississippi and Lamar Alexander of Tennessee, all of whom voted to open the government.

“I don’t think it hurts,” Paul said of the challenges.

“I’m a big believer in the free market,” he said. “That means competition’s good. It makes us all better.”

Paul, elected in 2010 with support from the small government Tea Party movement, opposed the measure to end the shutdown that had started Oct. 1.

While he isn’t backing any of the primary challengers against incumbents, Paul said the rivalry “makes us hone our message better, makes us present it better.”

Father’s Effort

Paul said his legislation to audit the Fed probably wouldn’t win the support of 60 senators, the number of votes needed to force a vote on the Senate floor. A companion bill passed the House of Representatives last year with a vote of 327-98. The effort was a cause pushed by his father, Ron Paul, a Republican and former U.S. representative from Texas.

Bernanke has repeatedly said the legislation would expose Fed policy making to political pressure and jeopardize the central bank’s independence.

“If they’re not doing anything untoward, there should be no reason why we couldn’t look at it,” Paul said.

The audit could also investigate whether it’s too easy for officials to move between Fed jobs and Wall Street, he said.

“It’s an issue that 70 percent of the American people don’t think it’s right for a guy to come out of the Treasury and make $160 million on Wall Street the very next year and then go back into Treasury the next year,” Paul said.

“This revolving door, we should at least know what the policy is and whether anybody’s getting rich off of that policy,” he said.

© Copyright 2014 Bloomberg News. All rights reserved.

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