U.S. senator moves to slow approval of Fed nominees

Reuters News
Posted: May 12, 2014 6:19 PM

WASHINGTON (Reuters) - U.S. Senator Rand Paul threatened on Monday to slow the approval of three Federal Reserve nominees unless the Senate agrees to vote on the Republican's bill to open monetary policy decisions to congressional audit.

If Paul puts a "hold" on the nominees, it would require the Senate to first vote to limit debate and then to vote on final approval. Republicans regularly force the Democrats who control the chamber to hold two votes on nominees.

Given that the nominees - Stanley Fischer, Lael Brainard and Jerome Powell - received unanimous and bipartisan support in the Senate Banking Committee, their eventual approval seems certain.

However, due to a tight legislative calendar ahead of a Memorial Day recess later this month, Paul's threat makes it more likely the normally seven-strong board at the Fed will drop to just three members for the first time in the U.S. central bank's history when Fed Governor Jeremy Stein steps down on May 28.

Democratic aides in the Senate said it was unclear whether a vote could be held before the recess, but that if not, it would be the first order of business after the recess.

Fischer, the former head of the Bank of Israel, has been nominated to be the Fed's vice chairman. Brainard, a former top U.S. Treasury official, has been nominated to a regular board seat. Powell already has a seat on the Fed board, but has been nominated to a fresh term.

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Even if all three are approved, President Barack Obama will still have two board seats to fill.

Fed officials have staunchly opposed any legislation that would expose monetary policy decisions to congressional audit as a threat to their political independence.

(Reporting by Timothy Ahmann, additional reporting by Richard Cowan; editing by G Crosse)