President Obama’s nominee to become chairman of the Federal Reserve came out against Kentucky Sen. Rand Paul’s “Audit the Fed” legislation on Thursday.
Asked by Republican Sen. David Vitter about the proposal, Yellen said she “strongly” supports “transparency and openness on the part of the Fed” but does not support any proposal that would “diminish” its independence.
“I would be very concerned about legislation that would subject the Federal Reserve to short-term political pressures that could interfere with that independence,” she said.
Yellen, the vice chairman of the Federal Reserve Board of Governors, made the comments during her confirmation hearing before the Senate Banking Committee.
Paul, a Republican, has told Democratic Senate Majority Leader Harry Reid that he will hold up her nomination unless the Senate votes on his audit bill.
“The American people have a right to know what this institution is doing with the nation’s money supply,” Paul said in announcing his hold last month. “The Federal Reserve does not need prolonged secrecy—it needs to be audited, and my bipartisan Federal Reserve Transparency Act will do just that.”
Paul is being backed up by other Republicans, including Texas Sen. Ted Cruz.
“I agree with Rand Paul: before the Senate votes on whether to confirm Janet Yellen, we should at the very least allow a vote on the Audit the Fed bill,” Cruz said Wednesday.
“We need to bring transparency to the Fed, so the American people can understand the scope and consequences of its policies,” he said.
If confirmed, Yellen would replace Ben Bernanke and would be the first woman Fed chairman.
Last year, the House of Representatives passed an “Audit the Fed” bill proposed by Paul’s father, former Rep. Ron Paul — but Reid never called that bill up for a vote in the Senate.
Paul’s supporters have noted, however, that Reid has supported such a proposal in the past. “There should be a Federal Reserve audit,” Reid said in an Oct. 14, 2010 debate. “We haven’t gotten it yet. But we’ve made some progress in that regard.”