Republicans look to grill Obama's Fed nominee Janet Yellen

Federal Reserve vice chairwoman Janet Yellen will field some potentially sharp questions from the Senate Banking Committee Thursday during a hearing on her nomination to replace outgoing Fed chairman Ben Bernanke. But two Senate Republicans have threatened to hold up her confirmation when the full Senate readies its final vote within weeks.

If confirmed - which she is expected to be, eventually - Yellen would be the first woman to lead the institution in its 100-year existence. Her policies would be largely in sync with those of Bernanke: extraordinary measures meant to bolster the economy, calming investors who might be worried about an abrupt shift.

When President Obama nominated her last month, Yellen said she would do her best to 'promote maximum employment, stable prices, and a strong and stable financial system.'

'The past six years have been tumultuous for the economy and challenging for many Americans,' she said. 'While I think we all agree, Mr. President, that more needs to be done to strengthen the recovery -- particularly for those hardest hit by the great recession -- we have made progress. The economy is stronger, and the financial system sounder.'

Still Republicans will likely take advantage of the hearing to probe her with questions about policies they don't like: the Dodd-Frank financial reform, efforts to boost the economy by buying bonds known as 'quantitative easing,' and the agency's transparency.

After she was nominated, Sen. John Cornyn, R-Texas, released a statement saying that Yellen 'subscribes to the liberal school of thought that the best way to handle to our nation's fiscal challenges is to throw more money at them. This stimulus obsession is the reason the nation finds itself in the fiscal calamity it does today, and the last thing we need is a leader at the helm of the Federal Reserve who is intent on more quantitative easing that harms our economy and further burdens hard-working Americans.'

For much of the summer, it was not clear that Yellen would get the nod from Obama for the top job. The other name to emerge as a top prospect was former Harvard President Lawrence Summers, who served as one of Obama's closest economic advisers and helped craft his response to the economic collapse. Yellen came from inside the Fed, having worked there for most of her career as an economist. She also got strong backing from Senate Democrats, more than 20 of whom signed a letter to Obama urging him to nominate her.

Summers ultimately withdrew his name from consideration for the job, predicting that 'any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the administration, or ultimately, the interests of the nations' ongoing economic recovery.'

The biggest threats to smooth sailing for Yellen are twin threats from two Republican senators who have threatened to place a hold on her confirmation.

Sen. Lindsey Graham, R-S.C., has repeatedly said he will hold up all Obama administration nominees until the Congress is able to interview survivors of the Sept. 2012 attack on the U.S. consulate in Benghazi, Libya. And Sen. Rand Paul, R-Ky., has said he will specifically block Yellen's nomination from going through unless Senate Majority Leader Harry Reid, D-Nev., agrees to allow a vote on his legislation to audit the Fed.

'The American people have a right to know what this institution is doing with the nation's money supply. The Federal Reserve does not need prolonged secrecy--it needs to be audited, and my bipartisan Federal Reserve Transparency Act will do just that,' Paul said in a letter released last month.

Still, Paul conceded in an interview with Bloomberg TV that 'in all likelihood' Reid would have the votes to ultimately secure Yellen's confirmation and any delaying tactics on his part would only be short-term.