Senate Republicans block critical vote on Fed nominees

President Biden’s plans to remake the Federal Reserve by appointing five of its seven governors hit a snag on Tuesday as Republicans on ...


President Biden’s plans to remake the Federal Reserve by appointing five of its seven governors hit a snag on Tuesday as Republicans on the Senate committee that sits at the center of the confirmation process delayed a vote on the choices.

Mr. Biden reappointed Jerome H. Powell as Fed chairman and appointed Lael Brainard, a current Fed governor, as vice chairman. He also named economists Lisa D. Cook and Philip N. Jefferson as governors and longtime Washington policymaker and lawyer Sarah Bloom Raskin as the new vice president for banking supervision.

The five potential officials were to face a vote before the Senate Banking Committee Tuesday afternoonwhich would have put them on track for a confirmation vote in front of the full Senate if they had passed.

But Senator Patrick J. Toomey, Republican of Pennsylvania, blocked the process due to concerns about Ms Raskin. Mr. Toomey’s office said in a statement that he and his fellow Republicans had decided not to show up for the vote. As a result, Democrats were unable to weed nominees off the committee because the majority of lawmakers must be physically present under Senate rules.

The maneuver was the latest step in an opposition campaign Mr Toomey has waged against Ms Raskin, who would be the top bank policewoman in the country if confirmed. Mr Toomey slammed Ms Raskin for her past comments on climate-related regulation, fearing she was being too militant in overseeing banks. More recently, he asked for more information about her interactions with the Fed while serving on the board of a fintech company that was pushing for a potentially lucrative central bank account.

“Until the basic issues have been adequately addressed, I do not believe the committee should proceed to a vote on Ms. Raskin,” Mr. Toomey said in the statement.

A spokesperson for the Senate Banking Committee acknowledged that the Republican blockade would likely delay the process, but suggested it does not involve the outright defeat of any of the nominations. Sen. Sherrod Brown, a Democrat from Ohio and chairman of the Banking Committee, suggested he would still try to hold a vote, although it was unclear whether that would work.

“Hopefully at least one of them will run,” Brown said of the Republicans.

The White House blasted Mr. Toomey’s maneuver.

“As President Brown has said, some Senate Republicans are playing politics with the American economy by blocking a vote on the Federal Reserve Chairman and a whole slate of well-qualified candidates,” said Jen Psaki, l White House press secretary, calling Mr. Toomey’s questions about Ms. Raskin’s ‘false allegations’.

Mr. Toomey and his colleagues said that Ms. Raskin, a former Fed and Treasury official, contacted the Federal Reserve Bank of Kansas City on behalf of Reserve Trust, a fintech company for which she served as a board member. Reserve Trust managed to secure a strategically important account at the Fed while serving on its board: to date, it advertises that it is the only company of its type to have such an account.

Ms Raskin had said in written responses to Mr Toomey’s questions earlier this month that she ‘did not recall any communication I had made to assist Reserve Trust in obtaining a lead account’. But Mr. Toomey said in a later letter that the Kansas City Fed President had told his staff that Ms. Raskin called her personally about the account in 2017.

While the Kansas City Fed insisted that he follow its protocol for granting the main Reserve Trust account, and nothing Ms Raskin did was a clear breach of government rules, Mr Toomey continued to press for more information.

“Significant questions about Ms. Raskin’s use of the ‘revolving door’ remain unanswered in large part because of her repeated insincerity with the committee,” Mr. Toomey said in his statement.

Mr Brown said before the vote he did not know what the next steps would be if the Republicans boycotted.

“If Republicans are as concerned as they say they are about fighting inflation, they should want a Federal Reserve board in place,” Brown said. Sarah Binder, a political science professor at George Washington University who co-wrote a book on Fed policy, said Democrats will have to come up with a strategy to overcome Republicans’ attempt to veto candidates, otherwise they might get stuck in limbo.

“It’s really a delay – it could still sabotage Raskin,” she said, noting that Democrats could break up nominations to try to push others through or could try to get enough support among the whole. of the Senate to strike down the committee’s rules. “It’s pretty unexplored, and they’re going to have to find a way.”

The Fed currently has four governors, and Mr. Powell is already in service as interim president since his term as head has officially expired.

If Ms. Raskin is elected separately, she could struggle to pass the Senate. Winning confirmation would require that she maintain the full support of the 50 lawmakers who caucus with Democrats, and that all of those lawmakers be present, unless she can win Republican votes. Senator Ben Ray Luján, Democrat of New Mexico, was absent as he recovers from a stroke.

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Newsrust - US Top News: Senate Republicans block critical vote on Fed nominees
Senate Republicans block critical vote on Fed nominees
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