Rand Paul threatens to block Yellen confirmation

Republican U.S. Senator Rand Paul threatened on Friday to put a 'hold' on the nomination of Janet Yellen to be chair of the Federal Reserve unless he gets a vote on a bill he has sponsored to put the central bank under more scrutiny.

"As part of Senate consideration of the Janet Yellen nomination to be chair of the Federal Reserve, I will request a vote on my bipartisan Federal Reserve Transparency Act," Paul said in a statement. "The American people deserve transparency from the Federal Reserve and the federal government as a whole."

An aide to Paul said no final decision had been made on whether to place a hold on the nomination, but if Paul did move forward, it would force Yellen's supporters to round up 60 votes in the 100-seat Senate to advance the nomination.

White House officials have said they expected to have to secure 60 votes for Yellen's nomination to clear procedural roadblocks. Democrats have expressed confidence in their ability to do so.

The swearing-in of New Jersey Democrat Cory Booker next week will return the Senate effectively to a 55-45 Democratic majority, meaning that only five Republican votes would be needed to support Yellen.

Although Yellen, currently the Fed's vice chair, is expected to win confirmation, the process is likely to be contentious.

Many Republicans have criticized the central bank's aggressive easing of monetary policy as a dangerous courtship of inflation that also risks fueling asset bubbles.

Paul is hoping to use the nomination of a new Fed chief as a chance to shine light on his Fed transparency bill, which is similar to one his father Ron Paul championed in the House last year that garnered some bipartisan support. Paul’s bill is co-sponsored by 24 Republicans and one Democrat.

The bill would open up the Fed's monetary policy decisions to congressional audit, a step Fed officials have argued would undercut the central bank's political independence.

But the bill has been cheered by some who say the Federal Reserve’s policies and the way it spends money are too opaque, and therefore off-limits to normal democratic processes.

“The argument that the Federal Reserve system should be exempt from any kind of audit can only be viewed as benefiting the elite interests of a banking sector that both sides of the aisle should agree enjoys a privileged monopoly only because Congress erroneously (but not permanently) forfeited its Constitutionally-mandated authority over the nation’s finances,” wrote economist Cedric Muhammad in Forbes.

Paul’s move to block Yellen’s nomination likely won’t tip the scales in favor of his bill, but it might bring the purpose of the Fed back into the public’s conscience. Last year, a Bloomberg News poll found that the majority of Americans thought the Fed should be abolished or seriously reformed.

Al Jazeera and Reuters