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Interview With Michigan Congressman Dave Camp; Janet Yellen Nominated As New Fed Chair

Aired October 09, 2013 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer here in Washington. We want to welcome our viewers here in the United States and around the world. Special coverage coming up. You're looking live right now, take a look at this. This is the White House state dining room where in a few minutes President Obama will announce his selection to become the next head of the nation's central bank.

The president is set to nominate Janet Yellen as the chair of the Federal Reserve Board of Governors. She would succeed Ben Bernanke whose term expires in January. Yellen currently is the Board's vice chair, the number two spot behind Bernanke. If she's confirmed by the U.S. Senate, Janet Yellen will become the first woman to lead the Federal Reserve in its 100-year history.

What kind of fed chief would Janet Yellen be? Let's bring in CNN's Christine Romans. She's been digging into her background. She knows a lot about this woman. This is an historic moment we're about to see, Christine. But tell us about Janet Yellen.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, she has an Ivy League pedigree. She is from Brooklyn, New York. She's had a decade at the fed and she is Chairman Ben Bernanke's right-hand. Wolf, some say Janet Yellen is probably the most qualified person ever to be nominated to head the Central Bank.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): Once called by a colleague a small lady with a large IQ, Janet Yellen has 40 years of economics research under her belt. After a PhD from Yale, she began her economic career at Harvard then Berkeley then moved to the Federal Reserve where she spent more than a decade.

She garners huge respect from her colleagues and has helped steer Fed Reserve from the worst of policies. She's seen as a steady land, likely continuing the policy of pumping billions into the economy each month. If confirmed by the Senate as expected, her biggest challenge will be to wind down that stimulus and allow the American economy to stand on its own.

She was one of the few who saw the housing crisis coming, warning in 2007 -- quote -- "In terms of risk to the outlook for growth, I still feel the presence of a 600-pound gorilla in the room, and that's the housing sector." Hundreds of economists pushed for her selection, but Yellen does have critics. Senator Bob Corker, a Republican, tweeting this following word of her nomination -- quote -- "I voted against Vice Chairman Yellen's original nomination to the Fed in 2010 because of her dovish views on monetary policy," adding, "We will closely examine her record, but I'm not aware of anything that demonstrates her views have changed."

Corker says he wants to know more about how she would taper down the Fed's unprecedented stimulus. And he's not alone. Her nomination comes at a delicate time for the financial markets and the stakes are high. Yellen would be the first woman joining the pantheon of Fed chiefs, now iconic figures Paul Volcker, Alan Greenspan, and the soon- to-be-retired Ben Bernanke.

(END VIDEOTAPE)

ROMANS: The confirmation could take months, of course, weeks at least, but Yellen already has key Senate Democrats on her side, Wolf. Over the summer, several wrote to President Obama urging her nomination, but there are Senate Republicans on the Banking Committee worried the Fed stimulus will stoke new bubbles in the economy. They're likely to push back against Yellen.

But at this point, Wolf, the odds are it looks as though confirmation will happen for her.

WOLF BLITZER, CNN ANCHOR: And she's reassuring to the markets, right?

ROMANS: Absolutely. They like to see the steady hand that's been right next to Ben Bernanke for two years and really her long history working in government and working at the Fed and working in academics as an economist, they think that's something Wall Street will like to see.

BLITZER: Christine, stand by.

We will continue this conversation. We're waiting for President Obama to introduce Janet Yellen as his choice to be the chair of the Federal Reserve. We have all angles of this important historic moment covered from the nomination to how it could affect the markets and more.

Let's go to the White House. Our senior White House correspondent, Jim Acosta, is standing by.

I assume, Jim, the president will also use this moment to speak out about the government shutdown, the need to raise the debt ceiling. Are you getting any advance word on what he's going to say?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: No advance word on what the president is going to say, only that it's going to be about 10 minutes of remarks from the president.

So you can go by that, Wolf. I think that's an indication that perhaps the president will be talking about what the nation is going through right now, the government shutdown, and what this White House has been warning about for days and days and days, this debt ceiling deadline that is coming up on October 17.

But to just bounce off what Christine Romans was talking about a few moments ago, Wolf, I think Janet Yellen works for this White House, works for this administration right now. And that is because they could not afford with everything that is happening right now, with all of the concern about these fiscal crises, another contentious battle up on Capitol Hill. That would have been the result had Larry Summers been tapped for the position.

Instead, it's Janet Yellen, somebody who is not only seen inside this White House as someone who could easily be confirmed up on Capitol Hill. She's also seen as someone who will continue the policies, as Christine mentioned, of Ben Bernanke. If the economy needs more cash pumped into it, the assumption is Janet Yellen will be supportive of that to some extent, to a moderate extent.

And so that's why Janet Yellen, I think, is being nominated today, and it's because she checked those boxes for this White House.

BLITZER: Stand by, Jim Acosta at the White House.

As we heard from Christine Romans, not everybody is necessarily thrilled with the prospect of Janet Yellen heading the Federal Reserve. Republican Senator Bob Corker of Tennessee, he tweets that he voted against her 2010 nomination to the Fed because of her dovish views on monetary policy.

Let's bring in our chief congressional correspondent, Dana Bash, up on Capitol Hill.

Dana, as you and our viewers know, the Senate will have to confirm her nomination to head the Federal Reserve, the first woman to be the Federal Reserve chair. What are the prospects as we're looking at live pictures You see Jack Lew, the treasury secretary, now in the dining room at the White House.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You know, obviously, the Senate is run by Democrats, and so right off the bat, her prospects look pretty good. But I actually just wanted to tell you that better to be lucky than good sometimes, and the chairman of the House Ways and Means Committee, Dave Camp, was just walking by and I asked him to come on.

As you said, it's the Senate that confirms, not the House, but you, with your role as this very powerful chairman, you have a very important opinion on somebody who is the person who would head the Federal Reserve. What do you think of Janet Yellen?

REP. DAVE CAMP (R), MICHIGAN: Well, I think it's really important that this nomination was finally made because we really had uncertainty who the successor to Bernanke was going to be, and now we know.

And obviously she's going to have to establish her credentials and what her views on monetary policy might be as she goes through her confirmation hearings in the Senate, but, clearly, she's been at the Fed. I would say she's an insider's choice in some ways there and is not going to have to learn the ropes because she knows that already.

BASH: Now, if you were in the Senate and you had a vote, would you vote to confirm her?

CAMP: Yes, I would probably want to give her an opportunity to come and be confirmed before I made a comment, because she does I think deserve an opportunity to make the case and really let us know what her views are going to be.

BASH: Wolf just read a tweet from Senator Bob Corker saying that she might be too dovish with regard to economic policy. Is that a concern of yours?

CAMP: I think there's been a lot of concern about the level of so- called quantitative easing that has gone one. I have certainly expressed those concerns and obviously being an insider, it seems as though she may continue those policies, but again, until she has her hearings and has a chance to testify, we don't really know.

BASH: I can't let you go without asking you one question of course about the crisis that we're in and we're about to be in. Would you go for what would effectively be a clean debt ceiling increase if it's temporary with the promise of negotiations for things dealing with the debt, deficit and so forth?

CAMP: Well, I do think we need to have a negotiated settlement and resolution to all of this. And if we could get to that, I think there are a lot of options that could be on the table.

And clearly the House has tried to signal that options are on the table by sending bills to the Senate to open parts of the government, but clearly we do need to make sure we get this well under way before we reach the debt limit, which is coming very soon.

BASH: Cannot let the U.S. default, that's what you're saying. You won't let it happen?

CAMP: No, and that date is fast approaching.

BASH: Thank you, Mr. Chairman. Thank you. Goes to show that maybe you shouldn't give tours to people past live cameras, because we will catch you every time, but thank you for agreeing to come on. Appreciate it.

Thanks, Wolf.

BLITZER: Dana, not only are you lucky, but you're good as well. Dana Bash up on Capitol Hill, thanks very much.

Richard Quest is here in Washington. Gloria Borger of course is here as well.

How is the world? You're here for the IMF meetings, the International Monetary Fund meetings in Washington. How is the world going to see Janet Yellen if she's confirmed by the Senate? RICHARD QUEST, CNN INTERNATIONAL BUSINESS CORRESPONDENT: Excellent choice. They will regard her first and foremost as a safe pair of hands.

She has to negotiate the exit strategy, and the crucial question is not when to begin tapering, but when to end tapering, how to get out of this vast store of debt that the government has built up, that the Fed has built up. She's very experienced and so they will regard it as an excellent choice.

BLITZER: And to all those who were criticizing the president, Gloria, for not bringing enough women into his inner circle, this is an historic moment.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Right. Sure, because she could conceivably become one of the most powerful women in the world, one would argue, right?

QUEST: She is. She is in the financial world.

(CROSSTALK)

BORGER: But I should also point out that it's clear to those of us who cover politics in Washington that she may not have been -- she was not, actually, the president's first choice. She herself did not think she was the president's first choice. That went to Larry Summers, who had been one of his chief economic advisers.

And when the left wing of the president's own party sort of said, no, no, we don't like Larry Summers, they see him too much as tied to Wall Street and Summers withdrew, then she of course rose to the top. It wasn't a clear pathway for her to this job.

QUEST: But I think what is particularly encouraging about the way the decision process took place is that once Summers was out, the president and the White House didn't go on a shopping expedition to see who else might be there. It became very quickly a case that she was the number two choice. And, therefore, she moved into the top spot.

Let me bring Rana Foroohar into the conversation as well as we await the president and Janet Yellen. Rana is our CNN global economic analyst, the assistant managing editor of "TIME" magazine.

Give us some thoughts. You know this woman, you have studied her over the years, and she -- as Christine says, she's going to be very, very reassuring to not only the markets, but to the international community.

RANA FOROOHAR, CNN ANALYST: Yes. I think the international community and the markets are going to be looking for two things, one, continuity.

She was someone who has been with the program of asset buying the Fed has been on for several years. She was one of the chief architects of this, Ben Bernanke's right-hand woman, so markets are going to feel good about that sense of continuity, because, as Richard mentioned earlier, getting ourselves out of this major buying spree without having some sort of a crash or a bubble bursting is going to be a major challenge.

And if she's confirmed, that will be her first priority, to try and figure out when to do that. I think also markets in general are happy about a dovish Fed chief because, frankly, the program of quantitative easing has kept the markets up. So, Wall Street likes that.

At the same time, and everybody knows at some point we're going to have to ease back from that money dump. The music is still playing and people are still dancing.

BLITZER: All right, Rana, thanks very much.

Let's bring back in Richard Quest and Gloria Borger as we await this moment. The president will walk out, Janet Yellen will walk out. The president will make a statement. I assume he will also talk, Gloria, about this partial government shutdown, the ramifications of that, the ramifications of the need to raise the debt ceiling.

He's going to use this as an opportunity as he's been doing every day on other occasions to make his points.

(CROSSTALK)

BORGER: You know, in many ways, Janet Yellen becomes the first- responder in a financial crisis.

QUEST: No question.

BORGER: She is our first-responder.

So he's got a nice segue there, because, obviously, if we do not raise the debt ceiling, we will be in a full-fledged financial crisis. And she will be a real -- leading the response team on that. So he can take this opportunity to say, we don't want to go there, I don't want to go there. They should just pass these clean bills. There's no way we should default on our debt. We will hear from the president, I presume, what we have heard every single day for many days now.

BLITZER: We will be listening very closely, Richard, to what the president says, because maybe there will be a nuance there, maybe there will be some little -- a little bit of wiggle room.

(CROSSTALK)

QUEST: There wasn't yesterday.

(CROSSTALK)

BLITZER: Wasn't much yesterday, but you know what? That's our job, to listen very, very closely.

QUEST: The thing about -- the fascinating part about today's nomination is that the chairman of the Fed is a unique position. Think about it. There's not been that many of them, a dozen, less than a dozen.

Volcker, Greenspan, Bernanke have seen the U.S. economy through some of the toughest times. This position isn't just like a treasury secretary or a chief economic adviser. This person now has enormous power in the U.S. economy and the global economy, and since the crisis of 2008, they have the ability to exercise it.

BLITZER: And that's a significant moment. A lot of people don't necessarily understand. Richard, give us a little Fed chair 101 explainer. Why is this job so important?

QUEST: Because they run the money supply of the United States and, thereby, the rest of the world. The Fed chair effectively runs the FOMC, the open markets committee that sets interest rates, sets monetary policy, and crucially, Wolf, they also are the chief regulator of many aspects of the economy.

It's a vast array of powers. They pull the levers of the economy when political gridlock means nothing is getting done.

BLITZER: That was Denis McDonough, the White House chief of staff. He's in the room now. A lot of other folks are in the room.

And you know what's going to happen later after this event? The president has invited, Gloria, all 200 members, Democrats in the House of Representatives to come over to another room at the White House and have a little powwow.

BORGER: Yes, you know, he canceled his international meeting in Asia. Now he's having nonstop meetings here with Democrats. He's also invited the Republican Caucus, although not the entire Republican Caucus is going to come.

I think the president's objective here is to stay in the public eye, making his case, Wolf, as much as he can and making the same points, as we heard at the press conference yesterday over and over and over again, for over an hour, making the same points about how he's not going to be held hostage. It's this whole controversy, by the way, has really let him off the hook on the question of all of the glitches of his health care reform plan.

BLITZER: We saw an aide brings the president's statement there. He's going to read it shortly.

But let me go quickly to Dana Bash.

Dana, are you getting more information on what we have been reporting, this possible short-term proposal to resolve this crisis?

BASH: Well, I have had more discussions with senior House Republican sources, one of whom said that they think it is likely that they could actually pass a short-term increase in the debt ceiling with Democratic help, something that they have not been willing to do to reopen the government, not been willing to do to fund the government, because as the source told me, the debt ceiling scares people.

They realize that this is something that could have very catastrophic implications when it comes to the global economy. And what that would mean, this source said to me they understand, is passing what would effectively be a short-term clean increase in the debt ceiling, what the president is demanding.

But, and here is the but, what they would have to do to get at least some Republicans on board in the House, especially, is to have very specific parameters of negotiations that would start immediately on what Republicans have been demanding, discussions about things that would go towards reducing the long-term debt and deficit, as you heard John Boehner say over and over again, make sure that this cycle doesn't continue. We don't have to keep raising the debt ceiling to pay our bills.

Whether or not that is possible or doable, we don't know because as several senior House Republican sources have emphasized to me, it's hard for them to discuss what's doable with their members if there's...

(CROSSTALK)

BASH: no discussions with the White House.

BLITZER: Here's the president.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good afternoon.

Over the past five years, America has fought its way back from the worst recession since the Great Depression. We have passed historic reforms to prevent another crisis and to protect consumers. Over the past three-and-a-half years, our businesses have created 7.5 million new jobs.

Our housing market is rebounding. Manufacturing is growing. The auto industry has come roaring back. And since I took office, we have cut the deficit in half. Now, I think everybody understands we still have got a lot of work to do to rebuild the middle class, but we have made progress.

And we shouldn't do anything to threaten that progress, for these hard-won gains have made a difference to millions of Americans, and, in part, we can thank the extraordinary grit and resilience of the American people. In part, we can thank the dynamism of our businesses.

But a lot of it also has to do with the choices we had as a nation to create more jobs and more growth. And one of the most important contributors to this whole process has been the Federal Reserve under the strong leadership of Ben Bernanke. For nearly eight years, Ben has led the Fed through some of the most daunting economic challenges of our lifetime.

For some time now, he's made it clear that he intends to finish his service as chairman at the end of his term, which is this January. So, today, I just want to take a minute to pay tribute to Ben for his extraordinary service.

But I also want to announce my choice for the next chair of the Federal Reserve, one of the nation's foremost economists and policy- makers, current Vice Chairman Janet Yellen.

You know, after I became president, I was proud to nominate Ben for a second term. And while the Fed is and must always be independent, I want you to know, Ben, I'm personally very grateful to you for being such a strong partner in helping America recover from recession.

Perhaps it's no surprise, as the son of a pharmacist and a schoolteacher, that Ben Bernanke is the epitome of calm, and against the volatility of global markets, he's been a voice of wisdom and a steady hand.

At the same time, when faced with potential global economic meltdown, he has displayed tremendous courage and creativity. He took bold action that was needed to avert another depression, helping us stop the freefall, stabilize financial markets, shore up our banks, get credit flowing again.

And all this has made a profound difference in the lives of millions of Americans. A lot of people aren't necessarily sure what the chairman of the Federal Reserve does, but thanks to this man to the left of me, more families are able to afford their own home, more small businesses are able to get loans to expand and hire workers, more folks can pay their mortgages and their car loans. It's meant more growth and more jobs.

And I would add that with his commitment to greater transparency and clarity, he's also allowed us to better understand the work of the Fed. You know, Ben has led a new era of Fed-speak, and been a little more clear about how the system works. And that is good for our democracy.

And I have to tell you, as I travel around the world, the job of the Fed chair is not just, you know, our top monetary policy-maker. The world looks to the American Fed chair for leadership and guidance. And the degree to which Ben is admired and respected and the degree to which, you know, central bankers all across the world look to him for sound advice and smart policy-making is remarkable.

He has truly been a stabilizing force, not just for our country, but for the entire world. And I could not be more grateful for his extraordinary service.

So, Ben, to you and your wife, Anna, and your children, Joel and Alyssa, I want to thank you for your outstanding service. Thank you so much.

(APPLAUSE)

OBAMA: Now, as I have said, the decision on who will succeed Ben is one of the most important economic decisions that I will make as president, one of the most important appointments that any president can make, because the chairman of the Fed is one of the most important policy-makers in the world.

And the next chair will help to guide our economy after I have left office. I have considered a lot of factors. Foremost among them is an understanding of the Fed's dual mandate, sound monetary policy to make sure that we keep inflation in check, but also increasing employment and creating jobs, which remains our most important economic challenge right now.

And I have found these qualities in Janet Yellen. She's a proven leader, and she's tough, not just because she's from Brooklyn.

(LAUGHTER)

OBAMA: Janet is exceptionally well-qualified for this role. She's served in leadership positions at the Fed for more than a decade.

As vice chair for the past three years, she's been exemplary and a driving force of policies to help boost our economic recovery. Janet is renowned for her good government. She sounded the alarm early about the housing bubble, about excesses in the financial sector and about the risks of a major recession.

She doesn't have a crystal ball, but what she does have is a keen understanding about how markets and the economy work, not just in theory, but also in the real world, and she calls it like she sees it. Janet also knows how to build consensus. She listens to competing views and brings people together around a common goal.

And, as one of her admirers says, she's the kind of person who makes everybody around her better. Not surprisingly, she's held in high esteem by colleagues across the country and the world who look to the United States, as I said, and the Fed for leadership.

Janet is committed to both sides of the Fed's dual mandate and she understands the necessity of a stable financial system where we move ahead with the reforms that we have begun to protect consumers, to ensure that no institution is too big to fail, and to make sure that taxpayers are never again left holding the bag because of the mistakes of the reckless few.

And, at the same time, she's committed to increasing employment, and she understands the human costs when Americans can't find a job. She has said before: "These are not just statistics to me. The toll is simply terrible on the mental and physical health of workers, on their marriages, on their children."

So Janet understands this, and America's workers and their families will have a champion in Janet Yellen.

So, Janet, I thank you for taking on this new assignment. And given the urgent economic challenges facing our nation, I urge the Senate to confirm Janet without delay. I'm absolutely confident that she will be an exceptional chair of the Federal Reserve. I should add that she will be the first woman to lead the Fed in its 100-year history.

And I know a lot of Americans, men and women, thank you for not only your example and your excellence, but also being a role model for a lot of folks out there.

So it's been said that Janet found love at the Federal Reserve, literally. This is where she...

(LAUGHTER)

OBAMA: This is where she met her husband, George, a celebrated economist in his own right. And their son, Robert, is an economist as well. So, you can imagine the conversation around the dinner table might be a little different than ours.

(LAUGHTER)

OBAMA: In fact, I have been told their idea of a great family vacation is the beach with a suitcase full of economics books. But this is a family affair. We thank George and Robert for their support as Janet begins this journey.

Again, I want to thank Ben Bernanke for the outstanding work that he's done. And, obviously, he will continue to help keep our economy moving forward during the remainder of his tenure here. So we will probably have occasion for additional goodbyes, and I know that Janet is very much counting on him to give some good advice to her as she moves into the chairman's spot.

But with this, I would like to give Janet a chance to say a few words.

(APPLAUSE)

JANET YELLEN, FEDERAL RESERVE CHAIR NOMINEE: Thank you, Mr. President.

I'm honored and humbled by the faith that you have placed in me. If confirmed by the Senate, I pledge to do my utmost to keep that trust and meet the great responsibilities that Congress has entrusted to the Federal Reserve, to promote maximum employment, stable prices, and a strong and stable financial system.

I would also like to thank my spouse, George, and my son, Robert. I couldn't imagine taking on this new challenge without their love and support.

The past six years have been tumultuous for the economy and challenging for many Americans. 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. As you said, Mr. President, considerable credit for that goes to Chairman Bernanke for his wise, courageous, and skillful leadership. It has been my privilege to serve with him and learn from him.

While we have made progress, we have farther to go. The mandate of the Federal Reserve is to serve all the American people. And too many Americans still can't find a job and worry how they will pay their bills and provide for their families. The Federal Reserve can help if it does its job effectively.

We can help ensure that everyone has the opportunity to work hard and build a better life. We can ensure that inflation remains in check and doesn't undermine the benefits of a growing economy. We can and must safeguard the financial system. The Fed has powerful tools to influence the economy and the financial system.

But I believe its greatest strength rests in its capacity to approach important decisions with expertise and objectivity, to vigorously debate diverse views and then to unite behind its response. The Fed's effectiveness depends on the commitment, ingenuity, and integrity of the Fed staff and my fellow policy-makers. They serve America with great dedication.

Mr. President, thank you for giving me this opportunity to continue serving the Federal Reserve and carrying out its important work on behalf of the American people.

(APPLAUSE)

BLITZER: So there goes the president of the United States, and Janet Yellen, who is now nominated to become the next chair of the Federal Reserve. Ben Bernanke, the current chair, we didn't hear from him. We will presumably be hearing from him down the road, though. He's still going to be chair for the next few months. His term expires in January.

Janet Yellen has to go through a formal confirmation process before the Senate. She has to be confirmed by the Senate and then she would become the first woman chair of the Federal Reserve in 100 years of the Central Bank's history.

Let's go to Jim Acosta over at the White House, who was watching all of this.

We didn't really hear the president say much, if anything, about the two crises that are under way in Washington right now, the need to get the government fully operational and the need to raise the debt ceiling.

ACOSTA: No, that's right, Wolf, but there was an implicit message there. And that was, don't mess with what's going on right now. Don't mess with the recovery as it stands now.

You heard the president say the country has fought its way back from the great recession, that Ben Bernanke, the current head of the Federal Reserve, has led the Fed through some of the most daunting challenges of a lifetime. The message there, I think, if it wasn't explicit, it was implicit, and it was that Janet Yellen can keep the Federal Reserve moving in the direction that Ben Bernanke has had it moving, but also at the same time, we don't want to go back to where we were in 2008.

That's the message that have heard from the president repeatedly over the last several days. You also heard it today from White House Press Secretary Jay Carney, and I think that we are going to hear that message as the days move forward as well, Wolf.

BLITZER: Let's see how it's playing up on Capitol Hill. Dana Bash has been watching and listening.