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Rand Paul threatens to block Fed confirmation

Sen. Rand Paul (R-Ky.) says he wants lawmakers to vote on a bill to audit the Federal Reserve. (Gary Emord-Netzley/AP)

Sen. Rand Paul (R-Ky.) threatened this week to block President Obama’s pick to lead the Federal Reserve, creating yet another speed bump in what has already been an unusually contentious nomination.

In a video posted online Thursday, Paul called for a halt on confirming Janet L. Yellen, the central bank’s vice chairman, for the top job unless lawmakers also vote on his bill to increase transparency at the Fed. The measure was originally introduced by his father, former representative Ron Paul (R-Tex.), in the aftermath of the financial crisis.

“I say no vote on a new Fed chairman without a vote on my Audit the Fed bill!” reads the text on a video made for Campaign for Liberty, the political organization founded by his father. The video was also sent by e-mail to the group’s 750,000 supporters.

On Friday, Paul issued a statement saying that “the American people deserve transparency from the Federal Reserve and the federal government as a whole.”

Although Paul’s action is unlikely to derail Yellen’s confirmation, it marks the first salvo in what is shaping up to be a broader fight over the central bank’s efforts to prop up the recovery and stabilize the financial system.

“This will provide a real opportunity for the Senate to debate monetary policy and the role of the Fed,” a senior GOP Senate aide said.

The nomination process has been rocky from the beginning. Obama had hoped to name his onetime close adviser Lawrence H. Summers to the post but faced a backlash from Democrats, prompting Summers to withdraw from consideration. This month, he selected Yellen for the job.

She has begun scheduling meetings with members of the Senate banking committee and a hearing is expected to be held next month, a Democratic committee aide said.

Once the nomination moves to the full Senate, Majority Leader Harry M. Reid (D-Nev.) could move forward even if Paul objects by calling for a cloture vote with the support of 60 senators.

Ylan Q. Mui is a financial reporter at The Washington Post covering the Federal Reserve and the economy.



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