ART CASHIN: Washington Has Proposed New Rules That Could Have 'Nuclear' Implications For Monetary Policy

REUTERS/Jonathan Ernst Staff members walk past the US Capitol dome ahead of President Barack Obama's first address to a joint session of congress, in Washington, February 24, 2009.With Ben Bernanke's term as Federal Reserve Chairman ending this year, everyone is speculating about who may fill his seat should he decide not to return.

The current frontrunner is current Fed Vice Chair Janet Yellen.

There are other contenders, but many doubt they'll be able to secure the votes needed to be confirmed.

However, UBS's Art Cashin points to the research of Strategas, who argues that the Fed appoint game may be changing.

From this morning's Cashin's Comments:

In an overnight note, part of Jason Trennert's outstanding team at Strategas explored whether the current Senate showdown might change more than what is currently being debated. In a paper titled "Change In Senate Rules For Nominations May Change The Dynamics For The Fed Appointment"; Dan Clifton, and Jeff Rubin postulate:

While this fight over filibusters may sound like an arcane “inside the Beltway” discussion, the consequences could be significant for monetary policy …... For example, our theme for who will be the next Fed Chair is to focus on which nominee can get 60 votes. We wrote last week that Larry Summers, Tim Geithner, and Christina Romer would be unlikely to garner 60 votes. But some, if not all, may be able to gain confirmation under the proposed new rules given that they are likely to garner 51 votes in the Senate with 54 Democrats voting.

If the debate on the rule change were directly on a successor to Bernanke, they would be nuclear indeed. Yet, the rules may be changed on some secondary posts, only to set precedent for some major decisions. Small changes can reshape great democracies. Let's hope crisis is averted.