Biden's Fed nominees in limbo after Republican vote boycott
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[February 16, 2022]
By David Morgan, Pete Schroeder and Lindsay Dunsmuir
(Reuters) -U.S. Senate action on President
Joe Biden's five nominees to the Federal Reserve stalled Tuesday after
Republicans boycotted a key vote over objections to Sarah Bloom Raskin,
the White House's pick to be the central bank's Wall Street regulator.
Senate Banking Committee Chair Sherrod Brown delayed a vote on the
slate, which includes Fed Chair Jerome Powell, after none of the 12
Republicans showed up for a scheduled vote Tuesday afternoon.
Senator Pat Toomey, the top Republican on the committee, had called on
fellow Republicans to skip the vote, citing what he said were unanswered
questions about Raskin's past role on the board of a fintech company.
The development comes as the U.S. central bank is gearing up to raise
interest rates to combat the highest inflation in 40 years.
"Instead of showing up to work, to do their job, Republicans have walked
out on the American people," Brown said to the other 11 Democratic
senators on the 24-member panel who gathered for the vote.
White House spokesperson Jen Psaki said the decision by Republicans to
boycott the meeting was "extreme" and promised to work with Brown on a
path forward for the nominations.
![](http://archives.lincolndailynews.com/2022/Feb/16/images/ads/current/2021_lda_Businessdirectory.png)
As of late Tuesday, that path was not clear, with Brown adamant he would
not split Raskin's nomination from the rest, a solution that Toomey had
proposed.
"Democrats will argue that Republicans are being hypocritical by
complaining about inflation while also blocking votes on these
nominees," Isaac Boltansky, policy director for brokerage BTIG, said in
an email exchange. "Republicans will argue that Democrats are being
unreasonable by refusing to pause on Bloom Raskin’s nomination."
It is unclear, he said, "which side will blink first."
Separately, Senate Republican leader Mitch McConnell met with Powell on
Tuesday to discuss inflation and the economy.
POWELL STILL IN CHARGE
While his confirmation for a second four-year term as Fed chief is
pending, Powell continues in a "pro tempore" chair role, remaining in
charge of both U.S. monetary policy and the central bank.
Most Republicans on the panel back a second term for Powell, a
Republican initially installed as Fed chair by then-President Donald
Trump. His first term expired earlier this month.
But they are as one in opposing Raskin's nomination as the central
bank's vice chair for supervision, the top U.S. banking regulatory role,
and have attacked her over past statements expressing support for using
financial rules to police climate change.
"Ms. Raskin’s repeated and forceful advocacy for having the Federal
Reserve allocate capital and choke off credit to disfavored industries
is alone disqualifying and reason enough to vote against her," Toomey
said Tuesday.
Raskin, who held senior roles at the Treasury and Fed under Democratic
President Barack Obama, told Toomey and the rest of the Senate Banking
panel at her confirmation hearing that it was not the Fed's role to tell
banks what firms to lend to.
She has also denied Republican's suggestions that she inappropriately
lobbied on behalf of a fintech firm on whose board she sat.
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![](../images/021622pics/news_g11.jpg)
The Federal Reserve headquarters in Washington on Sept. 16 2015.
REUTERS/Kevin Lamarque//File Photo
![](http://archives.lincolndailynews.com/2022/Feb/16/images/ads/current/stclara_lda_SPONSOR_090519.png) If confirmed, Raskin would become
the most powerful banking regulator in Washington, overseeing an
ambitious portfolio.
Her key projects would likely include building
tools to assess financial risks from climate change, reversing Wall
Street breaks granted by her predecessor, Randal Quarles, and
drafting new rules for fair lending and fintechs.
Raskin has been praised by progressive Democrats for her experience
and expertise. Moderate Democrats on the Senate Banking Committee
also spoke supportively of Raskin at her confirmation hearing, and
two of them -- Mark Warner of Virginia and Jon Tester of Montana --
told Reuters on Monday they both planned to vote for her and the
rest of Biden's Fed nominees.
OTHER NOMINEES
The three other nominees for Fed slots include current Fed Governor
Lael Brainard, who is up for the job of Fed vice chair, and proposed
newcomers Lisa Cook and Philip Jefferson.
All three used their confirmation hearings to signal their backing
of Powell's monetary policy agenda, which will see the Fed likely
begin lifting interest rates at its March 15-16 policy meeting in
what's likely to be the start of a series of rate hikes to quell
inflation.
Brainard, a Democrat appointed by Obama to be a Fed governor in
2014, is likely to win support for promotion to the vice chair
position, which would make her Powell's deputy, despite Republican
misgivings that she would push for the central bank to strengthen
its climate change policies.
Cook is an economist at Michigan State University, while Jefferson
is an economist and currently dean of faculty at Davidson College in
North Carolina.
All Democrats on the committee are expected to vote in favor of Cook
and Jefferson while at least one Republican, Senator John Kennedy,
also indicated he would support them both.
On Tuesday, Republican Senator Kevin Cramer said he would support
Jefferson and Powell, was open to Cook, and was a no on Raskin and
Brainard.
![](http://archives.lincolndailynews.com/2022/Feb/16/images/ads/current/humanesociety_sda022411.png)
If Cook and Jefferson, who are Black, are confirmed as governors to
the currently all-white Fed Board, it would make it the most
racially diverse in the central bank's 108-year history.
SENATE RULES
The standoff over Biden's Fed nominees is the latest example of the
obstacles Democrats have encountered moving forward with their
agenda in a body they control only by virtue of Vice President
Kamala Harris' tie-breaking vote as Senate president.
Rules agreed at the start of this session of Congress ensure that
Senate committees cannot advance legislation or nominees unless at
least one Republican is present, a change from the previous Congress
when Republicans had an outright majority on committees and could
move ahead even when Democrats staged walkouts.
(Reporting by Pete Schroeder, Lindsay Dunsmuir and Ann Saphir,
Andrea Shalal, Trevor Hunnicutt and Jarrett Renshaw; Editing by
Michelle Price, Dan Burns, Paul Simao and Jonathan Oatis)
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