By David Morgan, Pete Schroeder and Lindsay (NYSE:LNN) Dunsmuir
(Reuters) -Plans for a key U.S. Senate panel vote to move forward on President Joe Biden’s nominees to the Federal Reserve, including Jerome Powell as chair and Sarah Bloom Raskin as the central bank’s Wall Street regulator, were thrown into doubt on Tuesday as Republicans appeared set to boycott the proceeding.
The Senate Banking Committee’s 12 Republicans plan not to attend the afternoon vote scheduled for the five nominations, a person familiar with the matter said. If that happens, the 24-member panel would not have a quorum, preventing it from voting on Biden’s slate and conducting other business.
Asked about Republican plans not to attend the meeting, Democratic Senator Sherrod Brown, the committee’s chairman, said he had heard media rumors of a boycott but was not familiar with what Republicans were planning. The committee vote is scheduled for 2:15 p.m. EST (1915 GMT).
“If my colleagues are as concerned about inflation as they claim to be, they will not slow down this process, which will only hurt workers, their families, and our recovery,” Brown said in a statement released after media reported a possible boycott.
While most Republicans on the panel back a second term for Powell, a Republican initially installed as Fed chair by former President Donald Trump, they appear unified in their objection to Raskin’s nomination as the central bank’s vice chair for supervision, the top U.S. banking regulatory role.
Republicans have attacked Raskin over her past comments on using financial rules to police climate change and have also accused her of inappropriately lobbying on behalf a fintech firm on whose board she sat, accusations Raskin has denied.
Before news of the boycott emerged, it was widely expected that the committee’s vote on Raskin would be deadlocked 12-12. That would not end her nomination but would complicate and potentially delay her path to confirmation by the full Senate, where a simple majority is required for such votes.
With a tied banking panel, Raskin is more likely to need the support of all 50 Democratic senators, including moderates Joe Manchin and Kyrsten Sinema, who have opposed other aspects of Biden’s policy agenda. Democratic Senator Ben Ray Lujan is also recovering from a recent stroke, which may further slow the timeline in the event of a committee deadlock.
“Sarah Bloom Raskin’s nomination faces the stiffest headwinds of the five Fed nominees, and it will come down to a handful of centrist voters, but we view the odds of confirmation as modestly better than a coin flip right now,” said Isaac Boltansky, director of policy research for brokerage BTIG.
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, who held senior roles at the Treasury and Fed under President Barack Obama, 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 Raskin and the rest of Biden’s nominees.
OTHER NOMINEES
The committee will also be voting on four other nominees for Fed slots: Powell, current Fed Governor Lael Brainard, and proposed newcomers Lisa Cook and Philip Jefferson.
Powell, a Republican former investment banker, is set to sail through for another four-year term as Fed chair amid broad bipartisan support. His first term as chair expired earlier this month, but he remains in charge of monetary policy pending his confirmation.
Brainard, Cook and Jefferson used their confirmation hearings to signal their backing of the monetary policy agenda set by Powell, which will see the Fed likely begin lifting interest rates at its March 15-16 policy meeting, with several hikes expected to follow in a bid to bring an inflation rate running at the highest level since the early 1980s back under control.
Brainard, a Democrat appointed by Obama to be a Fed governor in 2014, also seems likely to be confirmed 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.
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.
Source : Reuters
