WASHINGTON -- A majority of the Democratic women serving in the House of Representatives are urging President Barack Obama to nominate Janet Yellen as chair of the Federal Reserve, putting additional pressure on the president to reject economist Larry Summers, who is rumored to be the frontrunner.
Thirty-eight of the 62 Democratic women in the House have signed on to a letter circulated by Rep. Maxine Waters (D-Calif.), saying that Yellen, currently the Fed vice chair, would be the "best choice" to lead the institution. It comes on the same day that Obama met with Democrats on Capitol Hill and heard from many members who were frustrated that Summers is reportedly the president's top choice for the job.
"Doctor Yellen has demonstrated a unique understanding of the impact of the Federal Reserve's policies on the middle class, with a critical focus on the balance of the mandate between stable prices and low unemployment," the letter reads. "During the subprime bubble, at a time when many economists were optimistic about unprecedented growth in the economy, she saw the bubble for what it was and predicted disaster in the banking system."
Long before serving as Obama's chief economic adviser, Summers worked in the Clinton administration as a protege of Treasury Secretary Bob Rubin, where he helped lead the effort to deregulate Wall Street. Many Yellen supporters are worried that Summers would follow in the footsteps of his mentor and dial back the Fed's efforts to lower unemployment in order to appease the bond market. Yellen, meanwhile, argues that protecting bondholders is not the Fed's only job.
If chosen, Yellen would be the first female Fed chair.
During the Wednesday meeting with House Democrats, Rep. Ed Perlmutter (D-Colo.) walked up to the microphone and simply said, "Larry Summers. Bad Choice." According to a Democratic staffer, he received applause from his colleagues. The president became agitated and rose to Summers' defense.
The feminist group Ultraviolet has called on Obama to choose Yellen, saying Summers is "a man known for his offensive and callous opinions on women." The National Organization for Women also endorsed Yellen last week in a statement criticizing Summers' record on bank regulation.
"Janet Yellen was one of the few in the Fed system to sound the alarm on subprime mortgages in 2007, while Lawrence Summers shut down Brooksley Born’s effort to crack down on derivatives,” said NOW President Terry O’Neill. “It’s not hard to connect the dots: lax regulation contributed to the financial meltdown that ushered in the ‘Great Recession’ -- with devastating impacts on women, who have less savings to fall back on because of an enduring gender wage gap. Lawrence Summers can't be trusted to understand the everyday economic problems women face."
House Minority Leader Nancy Pelosi (D-Calif.) has said it would be "great" if a woman were to be named Fed chair, but she has not explicitly come out and endorsed Yellen.
Roughly a third of Senate Democrats have signed on to a separate letter endorsing Yellen. Obama will need Senate Democrats' support to get his Fed pick confirmed.