Obama's Fed Chair Choice Gets First Confirmation Hearing
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Janet Yellen took another historic step today on the road to becoming the first woman to head Federal Reserve. Appearing calm and comfortable in the spotlight at her first confirmation hearing, Yellen answered questions about the Fed's controversial stimulus program, it's efforts to reduce unemployment and her commitment to controlling inflation.
NPR's John Ydstie has more on Yellen's performance before the Senate Banking Committee.
JOHN YDSTIE, BYLINE: After taking her seat at the witness table and introducing friends and family, including her husband, Nobel Prize-winning economist George Akerlof, Yellen confidently launched into a short prepared statement. It included an assessment of the Fed's role in trying to boost the economy out of the Great Recession, with extraordinary measures that she helped author as the Fed's vice chair.
JANET YELLEN: We've made good progress but we have further to go to regain the ground lost in the crisis and the recession.
YDSTIE: Yellen arrived at today's hearing with little doubt that she would be confirmed, since Democrats hold a 55 to 45 majority in the Senate. The question was how much pushback she might get from Republicans who disagree with the Fed's massive quantitative easing. It's currently pumping $85 billion a month into the economy.
Idaho Republican Mike Crapo asked the first of many GOP questions on the topic, citing studies showing that QE hasn't been effective.
SENATOR MIKE CRAPO: How do you respond to the concerns that quantitative easing has limited impact on economic growth and is, in fact, creating very serious risks in our financial markets?
YDSTIE: Yellen responded saying other studies show the big stimulus program has helped the economy, by lowering interest rates and she provided some concrete evidence.
YELLEN: It's not the only factor but it has been a positive factor in generating the recovery of the housing sector. I think we have seen a very meaningful recovery in automobile sales, spurred in part by low interest rates.
YDSTIE: Another worry among Republicans is that Yellen's support for the massive stimulus is a sign that she is a dove on inflation and that she'll balk at raising interest rates when inflation becomes a threat. Tennessee Senator Bob Corker was skeptical when Yellen was nominated by the president. He had voted against Yellen during her confirmation to be vice chair of the Fed. But at today's hearing, he seemed eager to document Yellen's willingness to raise rates.
SENATOR BOB CORKER: Share with all of us how many rate increases you have voted for during your term on the Federal Reserve.
YELLEN: I served as a governor from 1994 to '97 and we had a cycle of rate increases during that time, I believe 20 or more.
CORKER: Twenty or more. I think it was maybe 27 or so.
YELLEN: It could be.
CORKER: And how many have you voted against?
CORKER: OK. I thought that was just good to get into the record.
YDSTIE: Despite Corker's soliciticeness(ph), his office said after the hearing that he remains undecided about whether to support Yellen. He does plan to meet with her again next week.
Among Democrats, the biggest concerns were keeping the Fed's stimulus going long enough to further reduce unemployment, and a call for Yellen to strengthen the Fed's commitment to banking regulation, including solving the problem of too big to fail.
Massachusetts Democrat Elizabeth Warren liked what she heard from Yellen.
SENATOR ELIZABETH WARREN: I'm very glad to hear you will make it a top priority for the Federal Reserve to engage in the supervisory and regulatory responsibilities that help keep our financial systems safe.
YDSTIE: No one at the hearing disputed Yellen's qualifications. Along with her experience at the Fed in Washington, she ran the Fed's regional bank in San Francisco and chaired President Clinton's Council of Economic advisors. Her nomination could come up for a vote in the Banking Committee as early as next week and then be sent to the full Senate.
John Ydstie, NPR News, Washington.
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