Senate Majority Leader Mitch McConnell, R-Ky., filed cloture Thursday on the controversial nomination of Judy Shelton to the Federal Reserve, setting the stage for a floor vote next week on a pick described as dangerous by many mainstream economists.
Shelton was nominated alongside Christopher Waller, a respected economist at the St. Louis Federal Reserve Bank who, unlike Shelton, advanced out of the Senate Banking Committee with bipartisan support. But McConnell didn’t include Waller among the seven nominees in the cloture filing.
Shelton will need to get 51 votes, but Senate Majority Whip John Thune, R-S.D., told reporters in September that Shelton’s nomination would move to the floor “as soon as she has 51 votes.”
With Democrats assumed to be uniformly opposed to her nomination, Shelton can only afford to lose the support of four Republicans. So far, only two — Sens. Mitt Romney of Utah and Susan Collins of Maine — have publicly opposed her confirmation.
On Thursday, another potential no vote, Republican Sen. Lisa Murkowski of Alaska, told reporters that she would support Shelton.
Before Trump nominated her to the Fed, Shelton espoused highly unorthodox views on monetary policy and financial regulation.
For decades, she advocated the U.S. return to something akin to the gold standard, pegging the value of the dollar to an index of commodities. Such a move would severely restrain the Fed’s ability to respond to economic downturns, as it has during the current crisis to praise from across the political spectrum. She has also questioned federal deposit insurance, floated the idea of entering a monetary union with Mexico and Canada similar to the eurozone, and criticized the Fed’s political independence from the White House.
Shelton also criticized the Fed’s dovish monetary policy when President Barack Obama was overseeing an anemic recovery from a recession, but then reversed her position when Donald Trump took office, attacking the central bank for not lowering rates even further in a period of strong, sustained economic growth.
That led many observers to see Shelton as a partisan who would undermine the Fed’s commitment to promote job growth and steady inflation regardless of who occupies the Oval Office.
That history has also led some critics to worry that she’ll push the Fed to adopt monetary policies that would weaken the U.S. economic recovery from the coronavirus recession in order to wound President-elect Joe Biden politically.
Even her opponents have noted, though, that she’ll be just one of seven Fed governors and 12 members of the rate-setting Federal Open Market Committee. In order for Shelton to implement her policy preferences, she would need to convince others to join her. That doesn’t comfort some who consider her appointment to the Fed dangerous.
“Judy Shelton deserves zero votes from the Senate,” tweeted Tony Fratto, a Treasury Department official under President George W. Bush. “The Federal Reserve Board isn’t a toy.”
In September, more than 100 economists including seven Nobel Prize winners wrote to senators, urging them to vote against Shelton’s nomination, and another 70 former Fed officials signed a similar letter.
Before her nomination to the Fed, Trump picked Shelton to be the U.S. director of the European Bank for Reconstruction and Development. The Senate confirmed her by a voice vote in March 2018.