[Congressional Record Volume 140, Number 111 (Thursday, August 11, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 11, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
  NOMINATION OF JANET L. YELLEN, OF CALIFORNIA, TO BE A MEMBER OF THE 
            BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

  The assistant legislative clerk read the nomination of Janet L. 
Yellen, of California, to be a Member of the Board of Governors of the 
Federal Reserve System.
  The PRESIDING OFFICER. Under the previous order, 15 minutes will be 
under the control of the chairman of the Committee on Banking, Housing 
and Urban Affairs or his designee; 15 minutes under the control of the 
ranking member or his designee; and 15 minutes under the control of the 
Senator from North Dakota [Mr. Dorgan], or his designee.
  The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. RIEGLE. Madam President, I thank the Presiding Officer. I rise as 
chairman of the Senate Committee on Banking, Housing and Urban Affairs 
to support the nomination of Janet Yellen to serve as Member of the 
Board of Governors of the Federal Reserve system for a term of 14 
years.
  Clearly, this is a very important position, and I think the President 
has chosen wisely in selecting this nominee.
  I want to say before yielding to my colleague from North Dakota, I am 
going to defer further comment about this nominee. I know my friend 
from North Dakota has concerns about the Federal Reserve Board and the 
composition of its membership, and I am very respectful of his concerns 
and his view. I want to hear his views. So I am going to reserve the 
remainder of my time and listen to what he has to say. I can elaborate 
on this nominee's qualifications and why I think she will be an 
exceptionally good member of the Board.
  Having said that, I am interested in hearing the views of my 
colleague from North Dakota. I reserve the remainder of my time.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Madam President, I will not utilize all of the time 
allotted to me, but I do want to speak briefly about the Federal 
Reserve Board. I did not want us to confirm another member of the Board 
of Governors for the Federal Reserve System without a vote and without 
a discussion.
  I should say that I intend to vote for the nomination of Dr. Yellen. 
I think there is much to commend Dr. Yellen about her background and 
her views. I should also say at the same time that I hope in the future 
when we consider Federal Reserve Board nominees, we will have a real 
discussion and a real debate about monetary policy in this country.
  It is interesting that you cannot have a real debate or a thoughtful 
discussion about monetary policy in this country today. It does not 
matter what the views of a Fed appointee might be. When they come to 
the committee, they have to say certain things so as not to upset the 
financial market. The market determines what we say around here these 
days. You have to have a certain language, and conform to a certain 
view. You have to say the right kind of buzz words so as not to run the 
market off in some wild direction. These days the market reminds me of 
a wild-eyed horse I used to have when I was a kid. The least little 
thing seems to set it off--often without substance--in some weird 
direction.
  I was alarmed to read in today's paper that Dr. Greenspan recently 
testified on the Hill that the Fed is starting to pay more attention to 
the market because it has more of a view of what is happening with 
respect to inflation and the future than some of the indices that we 
now use.
  I can give you chapter and verse of how the market has behaved over 
the years. You can go back to the tulip scandal in the 1600's and go to 
the junk bond scandal in the 1980's to figure out where the market is 
and what kind of signals they give you about what is right or wrong.
  I'd like to show you, if I can, the Federal Reserve Board makeup as 
we discuss this subject. Again, I am going to be brief. I wanted to 
show my colleagues, as we discuss who is going to serve on the Board of 
Governors, who runs monetary policy in this country today. The reason I 
think it is important is that four times this year they have increased 
interest rates and they are fixing on Tuesday of this coming week to 
come to town and increase interest rates once again.
  That is a tax on every American family, and they will do it in 
secret. Most Americans will not know who they are. If we were to 
increase a tax, we would do it with public debate, and there would be a 
tremendous outcry. But that is not true of monetary policy. They will 
extract a tax from every American family and do it with no discussion 
or no thoughtful debate.
  Whose interest do they serve? There are five presidents of Federal 
Reserve regional banks who will vote next Monday. They are noted by the 
yellow stars. They will cast a vote on monetary policy next Tuesday. 
They run the regional Federal banks and they serve a board of 
directors. They serve regional bankers; that is who is on their board; 
that is who they owe their jobs to. They will come to town, 
unappointed, unconfirmed, unaccountable to anybody but their boards and 
bankers. Yet, they make decisions about interest rates that all of our 
constituents will pay.
  Quickly, let me run through a couple charts. Let us look at what has 
been happening in this country. There is no evidence that a serious 
threat of inflation is imminent. In fact, inflation is low and has been 
falling for 3 straight years in a row. Again, remember, we have had 
four interest rate hikes in recent months to combat inflation. Here is 
what is happening to inflation in this country.
  Mortgage interest rates, you see what has happened here. Once the Fed 
decided it was going to protect its big money bank interest and fight 
an inflation that does not exist, we see the tax on American families 
with the increase in mortgage interest rates.
  Employer's cost of labor are the lowest in 12 years. You see this 
chart. Do we have inflation coming from an increase in labor costs? Not 
that I can tell. Unit costs of labor are low and falling.
  So what is happening here? What is happening is monetary policy in 
this country is made in secret by the Federal Reserve Board, by the 
Board of Governors and by the Fed Open Market Committee. Probably all 
good people. I do not know most of them, but the fact is they have a 
constituency and they represent them well.
  I have said before that I would really prefer my Uncle Harold have a 
shot at serving on the Federal Reserve Board but, of course, Uncle 
Harold does not qualify. He does not have a Ph.D. in economics, does 
not have a background of having worked for the Fed at some point in his 
life. He has made some house payments, and knows about interest rates, 
but they would never put him on the Fed.
  I would like just once, and I hope in the future when we take a look 
at new candidates for the Federal Reserve Board, to have a real debate 
about interest rates or monetary policy in this country. In the 1800's, 
from barber shops to bars, they debated monetary policy in America, and 
it was healthy. In fact, there would not be any likelihood of a vote on 
the floor tonight on this subject unless some of us who cared--the 
Senator from Maryland, and others, the Senator from Nevada, Senator 
Reid--decided we probably ought to vote on this.
  We have a confirmation vote on Supreme Court nominees. It is very 
important. Federal Reserve Board members affect the lives of every 
single constituent in my State and every single constituent in every 
State in this country. And yet not a handful of Americans know their 
names or what they stand for or whose interest they serve.
  Dr. Yellen, as I have indicated, is a person with an excellent 
background. I visited with Dr. Yellen by phone today. I exchanged 
letters with Dr. Yellen. I raised some questions about the impact of 
global market activities on interest rate policy decisions.
  You know, it is interesting. When we talk about trade agreements, it 
is a global economy--NAFTA, GATT, ``It is all global,'' they say. So 
when we talk about interest rates, they say, ``Gee, you know what's 
happening? Too many Americans are being employed. As a result, we are 
starting to see upward inflationary pressure.''
  I say, ``Aren't the corporations hiring from the world's hiring 
halls? Gee, that's what I thought the global economy was about. Aren't 
consumers buying refrigerators from the world's factories?''
  ``Oh, that's different.''
  It is a global environment when you talk about trade, but it is a 
different measurement when you talk about interest rates and monetary 
policy. I raised these questions with Dr. Yellen, and she indicated to 
me they were interesting questions and questions not really very well 
addressed these days by mainstream economists.
  Mr. SARBANES. Will the Senator yield for a question?
  Mr. DORGAN. I will be happy to yield.
  Mr. SARBANES. The Senator's charts on unit labor cost and inflation 
rate actually support the very argument he has been making. We have 
some good growth. The Fed says we have inflation, we need to slow the 
growth down. We need the growth and we need the jobs.
  Where is the inflation? The Senator put up the chart and showed 
inflation is low and falling. He put up another chart to show the unit 
of labor cost, the best they have been in 30 years.
  So exactly the point the Senator is making is substantiated by what 
the statistics show us.
  Mr. DORGAN. I appreciate the Senator's comment. Let me make one 
additional point. We went through wrenching debate and agonizing debate 
in this country last year trying to put together a deficit reduction 
plan--taxes and spending cuts and a whole range of things that were 
very difficult--a plan to put this country back on a track toward 
economic growth.
  So we got the economy started again. We started to gear up toward 
cruising speeds to get the American economic engine working to employ 
people and give us an opportunity. And guess what? The Fed members meet 
behind closed doors in secret and decide to raise interest rates. I 
might add that the Fed is the only dinosaur left that meets in secret 
that I know of, and they made a decision to put the brakes on the 
American economy. Too many Americans are employed. This economy is 
growing too fast for our tastes. We worry about the ``over the 
horizon.'' We have a view that no one else can quite see and a danger 
that is not picked up on the charts.

  Well, what is happening I think is unfortunate for the American 
families who are looking for work amd the families who are going to 
have to pay a higher mortgage because of the action of the Fed.
  The Senator from Nevada and I, the Senator from Maryland and others 
have talked about reform of the Federal Reserve Board, and I am going 
to push that. I have cosponsored and sponsored that legislation in the 
House and the Senate. We need to do something to make the Fed more 
accountable to the American people.
  No, I am not saying we ought to take monetary policy over in the 
political halls of this country or in the Chambers of the House and 
Senate. That is not what I am saying at all. But no longer should we 
have decisions that are important, that affect all of our families in 
this country, made in secret by people who I think represent a 
constituency that is different than the constituency I see.
  Madam President, I am going to vote for Dr. Yellen. I am anxious to 
have her come to town and look forward to meeting with her. I do say 
again you are going to hear a lot more from me, and I hope others, on 
the floor about the Fed.
  I would say one more thing. When these folks come trotting down next 
week, the ones with the yellow stars, and they sit down in the closed 
room of the Board of Governors and decide they want to tax every 
American once again in a higher interest rate because they see 
something that does not exist, I am going to be here on the floor of 
the Senate showing their picture to the American people so that we all 
know who is doing it and get a chance to evaluate why they are doing 
it. This sort of thing in my judgment needs to change, and I hope this 
discussion tonight may be the first step on the road to that change.
  Madam President, I yield the floor.
  Mr. RIEGLE. Madam President, if I may, I appreciate what the Senator 
has said.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. RIEGLE. I think and say that I share some of the same concerns 
that he has expressed here both in terms of the way policy is made, 
what the result of some of that policy has been, and the whole process 
by which we reach out and look at possible candidates for the Federal 
Reserve Board now and in the future.
  I do want to say with respect to Ms. Yellen that her job 
qualifications are excellent. She has been a highly regarded economics 
professor at the University of California, Berkeley now for 14 years. 
She serves on the panel of economic advisers for the Congressional 
Budget Office and on the Brookings panel on economic activity. Much of 
her professional work has focused on improving our understanding of 
unemployment problems in this country and business cycles and how they 
work.
  She has also been very active in looking at a number of important 
international financial trade issues. She has taught a course at 
Harvard and the London School of Economics.
  But I would say, in a sense even more importantly, 3 weeks ago we 
held a hearing on her nomination. We questioned her for more than 2 
hours, so this was not a routine discussion. We attach the same 
importance to these nominees as the Senator from North Dakota properly 
does. And we pressed her very hard on these questions because they are 
matters of grave concern to us as well.
  I thought she gave us very good answers. She made it clear that she 
feels strongly that we ought to be driving toward maximum employment in 
our economy with moderate long-term interest rates, without kicking off 
an inflationary spiral. Clearly, her work in that area has been very 
strong, and her sensitivity was there and it was obvious to me.
  I must tell Senators I was listening very carefully on that point 
because we suffer from high interest rates in my State, in Michigan, 
probably as much as any State. I quite agree with the Senator that 
interest rates, high interest rates, themselves are inflationary. You 
can refer to them as, in a sense, a form of taxation, if you will, if 
they are higher than they need to be.
  High interest rates are by their very nature inflationary because 
they add to the cost of things as the cost of credit gets factored into 
prices of things, whether it is a home mortgage or a car loan or 
whatever it might be.
  You have a hard time squeezing that admission out of members of the 
Federal Reserve Board, that high interest rates themselves, even if 
offered as an anti-inflationary strategy, can in fact themselves add to 
the inflationary pressure. And the Fed does not do a perfect job.
  During the last recession, as Senator Sarbanes pointed out as 
skillfully as anyone else along with Senator Sasser, you had a 
situation where the Fed during that recession adjusted interest rates 
23 times and, frankly, never got it right in terms of sort of getting 
us out of that condition, not that they could do it all by themselves. 
Monetary policy obviously had a lot to do with it, in terms of the 
degree to which you might help foster a turnaround in the business 
cycle, an upswing in better employment prospects. So the record is far 
from perfect.
  If you a had a car that was not running right and you took it down to 
the service station to get it fixed, and they worked on it, charged 
you, and you paid the bill, and you brought it home and it still did 
not work right, and you took it back 23 times, after a while you would 
start to wonder if they knew what they were doing.
  I think it is fair to say that that was part of the history of this 
long recession that we finally have come out of since the Clinton 
administration has come to town and we have put a budget package in 
place, and we have started to make some progress. We have seen 
employment go up, unemployment numbers come down, and we have not seen 
a re-igniting of inflation, as the Senator points out.
  But without prolonging that debate, I can attest to the Senator in my 
own view I think this is a solid candidate. The Senator has indicated 
he plans to vote for her. But I thought the Senator's points were well 
taken and they are not lost on me as chairman of the committee.
  Mr. DORGAN. If the Senator will yield, I was not chagrined at the 
effort by the committee.
  Mr. RIEGLE. I understand.
  Mr. DORGAN. I think you folks on the committee care as much as I do 
about this.
  With respect to whether the Fed is right or wrong, you expect them to 
be right occasionally. As the old saying goes, even a stopped clock is 
right twice a day. You would expect them to stumble into the right 
answer on occasion, if nothing else. But the Fed using the indices it 
uses would measure a hurricane as a source of national economic growth. 
Hurricane Andrew was one-half of 1 percent of economic growth in this 
country because you do not measure the damage; you measure the 
construction. A car accident outside the Capitol would be viewed as a 
source of economic strength, in indices the Fed would use. Somebody is 
going to be employed to fix a fender. Of course, they would not count 
the damage to the fender.
  My only point is I want this to change.
  The Senator from Maryland I know wants to speak.
  Mr. RIEGLE. Let me yield him the balance of my time, if I may.
  Madam President, I yield the remainder of the time I have to the 
Senator from Maryland, who, of course, not just serves on our committee 
accordingly but has served previously as chairman of the Joint Economic 
Committee.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Madam President, what is the time situation?
  The PRESIDING OFFICER. There are 8 minutes remaining.
  Mr. SARBANES. Madam President, first of all, I wish to commend the 
very able Senator from North Dakota for the statement he has just made. 
The American people need to understand how important to their daily 
lives the members of the Board of Governors of the Federal Reserve are, 
and the various presence of presidents of Federal Reserve banks who sit 
on the Open Market Committee. The 7 members of the Board of Governors 
are on the Open Market Committee and 5 of the 12 presidents of the 
Reserve banks are on that committee, and they rotate. So one year one 
will be on, another year another will be on.
  As the Senator from North Dakota pointed out, the presidents of the 
Reserve banks, the regional banks, are picked by private interests. 
They make public policy, but they are picked by private interests to 
make public policy.
  Now, the Board of Governors is different. The Board of Governors is 
nominated by the President and confirmed by the Senate, so they get a 
legitimacy in a democratic system to make public policy by their 
nomination by the President and their confirmation by the Senate.
  That is not true of these presidents of the Federal Reserve banks, 
and I think that is a very important disconnect in our system, very 
frankly. If it was up to me, I would think they should not be on the 
Open Market Committee and just the Board of Governors ought to make 
these decisions.
  Of course, if you get on the Federal Reserve, you get a 14 year 
term--14 years. I think the Senator is right to say these are important 
positions and we ought to have a vote on them, much like we do on 
people who go on the Supreme Court of the United States.
  Now, I agree with his economic analysis. We put a fiscally restrained 
policy into place last August to bring down the budget deficit. That in 
effect constrains the economy, so you say, well, where will you get the 
impetus for the economy to grow and to get economic growth and jobs?
  Well, we assumed it would come from low interest rates, from an 
accommodating monetary policy. For years, the Fed and others have been 
telling the Congress you have to get the budget deficit under control. 
Well, that is exactly what we did a year ago, with some very tough 
decisions in this body.
  Interestingly enough, a lot of the people who complained the most 
about the deficit, when it came to voting the tough decision to do 
something about it, were not there to do it. They will be out here for 
a balanced budget amendment to the Constitution, but when you come 
along and say, well, now here is a package, we are going to do serious 
spending cuts, we are going to raise some additional revenues in order 
to reduce the deficit, they are not to be seen or heard from.
  In any event, we did that. We had an accommodating monetary policy. 
Interest rates were low. The economy began to grow. Beginning in 
February, the Fed started taking up the interest rates. And they have 
now gone on long-term rates, 30-year mortgage rates, from under 7 
percent to almost 9 percent. So if you are a young couple wanting to 
buy a home, you may not be able to afford it at the current interest 
rates.
  They sort of shrug their shoulders and, say, ``Too bad.'' I sort of 
say, why are these young people who want to buy a home being denied the 
opportunity? What is it in the economic circumstance that calls for the 
higher interest rates when, as the able Senator's chart shows, there is 
no inflation problem? In fact, it is the best performance in 30 years. 
Unit labor costs are the best in 30 years. And, yet, they are dampening 
down the economy when we need the economic growth and when we need the 
jobs. The unemployment rate is still above 6 percent.
  So I commend the Senator from North Dakota for his statement. I agree 
with him. These matters ought to be debated. The Federal Reserve ought 
not simply to make pronouncements sort of in a cloud of smoke. Actually 
Volcker did that more than Greenspan because he smoked that cigar. So 
he comes in and makes his statement, and with the sort of cloud of 
smoke that accompanied it.
  But there are in some circles in this country the assumption that, if 
you question the judgments or the policies of the Federal Reserve, 
somehow you are outside of the proper bounds of political discourse. 
``Oh, they are trying to politicize the Fed.'' We are not trying to 
politicize the Fed. But we think the Fed ought to lay out a rationale 
and a justification for the policies it is taking and that it ought to 
be a reasonable matter for debate.
  The economic journals are full of articles criticizing the Fed's 
policies and supporting the Fed's policies. So it is obviously a 
subject of reasonable debate. The newsletters from the investment 
houses, although biased toward the Fed, some are critical of the Fed's 
interest rate policies. Others support it. If it can be debated on Wall 
Street, why should it not be debated here in the Congress with more of 
a concern for Main Street? The last time the Fed took the rates up, the 
Chamber of Commerce, mind you, said that they were worried that Main 
Street was being sacrificed to Wall Street. And I worry about that as 
well.
  Let me just very briefly turn to the nominee that is before us. I 
appreciate the fact that the able Senator from North Dakota has 
separated the broader and very important point I think he is making 
about monetary policy, and about debating it, about the secrecy with 
which the Fed operates, about the undemocratic nature of the presidents 
of these regional banks being on the open market committee. He has 
separated those very important issues from the question of this nominee 
because I do think that Janet Yellen is qualified. I do think she ought 
to go on the Board of Governors. She was approved by the Banking 
Committee by a vote of 18 to 1.
  I think a brief review of her background makes clear that she is 
highly qualified to serve on the Board of Governors. She received her 
BA from Brown University, as a summa cum laude. She graduated with the 
highest honors in economics with a Phi Beta Kappa. She received the 
National Science Foundation Graduate Fellowship and went on to Yale 
where she got her Ph.D. 4 years later.
  So she holds a Ph.D. in economics from Yale. She has been an 
assistant professor of economics at Harvard; a lecturer at the London 
School of Economics; and she has been now for some number of years 
professor of international business and trade at the School of Business 
of the University of California at Berkeley, since 1980. She has taught 
international and macroeconomics in the MBA and the executive education 
programs of that school. She has received the Distinguished Teaching 
Award at the University of California at Berkeley.
  She is recognized in the profession as one of the highest quality. 
She is published widely in the fields of macroeconomics and 
international economics.
  Actually, much of her work is focused on understanding the causes of 
unemployment and how they may be alleviated. I think the analytical 
talent she brings to the Federal Reserve is second to none. I think she 
has an understanding of the impact of economic policy decisions on the 
lives of everyday people.
  I commend the President for nominating a person of this caliber to go 
on the Board of Governors. This is a very distinguished, very able, 
very serious-thinking person. And I for one look forward to her service 
on the Federal Reserve Board.


             statement on the nomination of janet l. yellen

  Mr. D'AMATO. Madam President, I rise today to support the nomination 
of Janet L. Yellen to serve on the Board of Governors of the Federal 
Reserve System. Madam President, Ms. Yellen is well qualified for the 
position.
  Educated at the distinguished Brown University, and later earning a 
Ph.D. from Yale University, Ms. Yellen has demonstrated a mastery of 
economics and monetary policy. Through her extensive published research 
and her prior service at the Federal Reserve as an economist in the 
Division of International Finance, she has demonstrated her analytical 
skills to assist the Fed in its complex mission as the central bank and 
its control over monetary policy.
  More importantly, Madam President, Ms. Yellen has openly expressed 
the importance of securing the independence of the Federal Reserve 
Board. Congress has devised a system where the Federal Reserve is 
accountable to the Congress and can best serve the American people by 
focusing on long-term growth. Ms. Yellen has pledged her support to 
this cause.
  Madam President, I recommend that this body support the nomination of 
Ms. Janet Yellen to the Board of Governors of the Federal Reserve.


              statement on the nomination of janet yellen

  Mr. RIEGLE. Madam President, I rise in support of the nomination of 
Janet Yellen to serve as a member of the Board of Governors of the 
Federal Reserve System for a term of 14 years. This is a very important 
position, and I think the President has made an outstanding choice.
  Federal Reserve Board members have the principle responsibility 
within the government for economic stability. Their goal is to maintain 
a healthy rate of growth in jobs while permitting only a low rate of 
growth of prices. It is a difficult job and a vitally important one. 
Mistakes, when they occur in policy formulation and adjustments, can be 
extremely costly. The recession we have just essentially recovered from 
cost us more than $700 billion in lost production over a 4-year period. 
It took the Fed 23 policy changes to finally get interest rates low 
enough for that recovery to proceed. We cannot expect the Fed to avoid 
recessions entirely, but I think it is fair to say that the Fed's 
decisions can have a powerful effect on how costly recessions are and 
how frequently they occur.
  The Federal Reserve also has other significant tasks. It is the 
principal Federal regulator for a large share of our state-chartered 
banks. It supervises, and partly operates, our financial payments 
system. And the Fed has perhaps the primary role in avoiding any 
systemic financial market failures.
  Federal Reserve Board members have a number of noteworthy issues to 
resolve, together with the other financial regulators. These include 
finding a way to significantly consolidate our bank regulatory agencies 
and ensuring that public risks posed by the private use of derivatives 
are limited and under a reasonable degree of supervision and control. 
In my view, the Fed must also do a far better job of enforcing and 
applying our community reinvestment and fair lending laws. There has 
been progress in that area but it has been slow in coming.
  This nominee's qualifications for the job are excellent. She has been 
a very highly regarded economics professor at the University of 
California at Berkeley for 14 years. She serves on the panel of 
economic advisors for the Congressional Budget Office and on the 
Brookings Panel on Economic Activity. Her work has focused on improving 
our understanding of unemployment and business cycles. And she has also 
examined German reunification, trade responses to exchange rate 
changes, income distribution, and a variety of other issues. She has 
also taught at Harvard and the London School of Economics.
  Three weeks ago, the banking committee held a hearing on this 
nomination and questioned Ms. Yellen for more than 2 hours. She gave us 
very good answers. When asked whether monetary policy should focus 
exclusively on fighting inflation, she said that she believed the Fed 
needs to be focused on maximum employment, and moderate long-term 
interest rates, as well as inflation. With respect to the Fed's next 
policy move, she said she had no predisposition to act in either 
direction: to lower interest rates to forestall a recession or to raise 
them if signs of emerging inflation appear.
  I think this is a nominee who understands what the consequences of a 
weak economy are to real people. She has spent a large portion of her 
career studying unemployment. As she told our committee:

       The toll of unemployment, like that of a regressive tax, 
     falls most heavily on groups in the workforce that are least 
     able to bear the burden. Young workers deprived of gainful 
     employment may have careers which are permanently stunted 
     because they cannot develop the skills which are critical to 
     their long-term job prospects.

  She also pointed out that because a weak economy reduced the 
incentive and ability of firms to make investments, ``high unemployment 
harms long-term living standards.''
  But she also understands the dangers of inflation. She told us:

       The recession of 1982-83 illustrates the enormous price 
     that workers and businesses paid to bring inflation under 
     control after it built up in the 1970's. Having incurred such 
     a high price to lower inflation then, it would be foolhardy 
     now to squander the fruits of this effort.

  I think she is someone with balanced views and a superb background. 
The banking committee voted 18-1 to report her nomination favorably and 
I urge my colleagues to confirm this nomination speedily.
  Mr. DORGAN. Madam President, I yield the remainder of my time.
  Mr. STEVENS. Madam President, I yield back the time of the Senator 
from New York.
  The PRESIDING OFFICER. The question is, Shall the Senate advise and 
consent to the confirmation of the nomination of Janet L. Yellen, of 
California, to be a Member of the Board of Governors of the Federal 
Reserve System? On this question, the yeas and nays have been ordered, 
and the clerk will call the roll.
  The legislative clerk called the roll.
  The result was announced--yeas 94, nays 6, as follows:

                      [Rollcall Vote No. 281 Leg.]

                                YEAS--94

     Akaka
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boren
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Chafee
     Coats
     Cochran
     Cohen
     Conrad
     Coverdell
     Craig
     D'Amato
     Danforth
     Daschle
     DeConcini
     Dodd
     Dole
     Domenici
     Dorgan
     Durenberger
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Gorton
     Graham
     Gramm
     Gregg
     Harkin
     Hatch
     Hatfield
     Heflin
     Hollings
     Hutchison
     Inouye
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mack
     Mathews
     McCain
     McConnell
     Metzenbaum
     Mikulski
     Mitchell
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Nickles
     Nunn
     Packwood
     Pell
     Pryor
     Reid
     Riegle
     Robb
     Rockefeller
     Roth
     Sarbanes
     Sasser
     Shelby
     Simon
     Simpson
     Smith
     Specter
     Stevens
     Thurmond
     Warner
     Wellstone
     Wofford

                                NAYS--6

     Brown
     Faircloth
     Grassley
     Helms
     Pressler
     Wallop
  So, the nomination was confirmed.
  The PRESIDING OFFICER. Under the previous order, the motion to 
reconsider the vote is laid upon the table, and the President will be 
notified of the Senate's action.

                          ____________________