WASHINGTON -- Although Sheila Bair, the former chairwoman of the Federal Deposit Insurance Corp., is a Republican, she has been one of the most outspoken supporters of Democrat Janet L. Yellen to be the next Federal Reserve chief.
Now, with Yellen the apparent front-runner for the job on the strength of strong liberal backing, Bair is making the case to her fellow Republicans in the Senate that they should vote to confirm the nomination.
Bair and many other Republicans have been critical of the Fed’s unprecedented stimulus policies, which Yellen has supported since becoming the central bank’s vice chair in 2010.
But blocking the confirmation of a “well-qualified woman” would not be wise, Bair said in an opinion article Tuesday on the Fortune/CNN Money website.
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“Opposing her would be harmful to the party. This will be an historic nomination,” Bair said. “She would be the first woman to head the Federal Reserve.”
“And by blocking her,” Bair continued, “the GOP will risk the public perception that they oppose her because she is outside the male-dominated Wall Street club.”
President Obama could announce a nominee as early as this week to succeed Fed Chairman Ben S. Bernanke, whose term expires in January.
The other leading contender, former Treasury Secretary Lawrence H. Summers, withdrew from consideration Sept. 15 amid concerns that he could not be confirmed in the Senate because of expected opposition from some Democrats along with many Republicans.
Yellen is believed to have near-unanimous Democratic support. But she would still need some Republican votes to avoid a filibuster.
In addition to arguing that opposing Yellen would hurt the Republican Party, Bair gives several other reasons why the GOP should confirm the nomination.
At the top of the list, Bair said, is that Yellen is “supremely well-qualified.”
Yellen is in her second stint as a Fed governor and also was president of the Federal Reserve Bank of San Francisco from 2004 to 2010. Yellen has been open-minded and has shown she will listen to competing viewpoints, Bair said.
Although Yellen is a Democrat who was chair of the White House Council of Economic Advisors under President Clinton, she would be independent of the Obama administration, Bair said. Yellen has spent most of her career in academia and at the Fed, and only once has visited the White House since rejoining the Fed board in 2010.
Yellen’s recent tenure at the Fed means she’s well-versed in the data and arguments behind the Fed’s stimulus policies, making her “best equipped to eventually navigate us out of it,” Bair said.
Bair’s last argument was her most practical. After Bernanke’s second term as chairman expires on Jan. 31, the Fed vice chair would take over if a confirmed successor is not in place. And that is Yellen.
“The GOP has very little leverage in stopping her from becoming the next Fed chair,” Bair said. “If the president wants her as the next Federal Reserve Board chair, he can get his way no matter what the Senate does.”
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