Sarah Bloom Raskin on Tuesday withdrew from consideration to be Federal Reserve vice chair for supervision, according to the White House.
President Joe Biden blamed the withdrawal on Senate Republicans, who have led a weekslong boycott that prevented her nomination from advancing to the Senate floor. But it was opposition from key Senate Democrat Joe Manchin III of West Virginia that made her confirmation impossible in the evenly split Senate absent support from a Republican.
“Despite her readiness — and despite having been confirmed by the Senate with broad, bipartisan support twice in the past — Sarah was subject to baseless attacks from industry and conservative interest groups,” Biden said in a statement. “Unfortunately, Senate Republicans are more focused on amplifying these false claims and protecting special interests than taking important steps toward addressing inflation and lowering costs for the American people.”
Manchin on Monday said he would oppose her confirmation, citing her stance on climate change and financial risk.
“The United States must have policy leaders and economic experts who are focused on the most pressing issues facing the American people and our nation — specifically rising inflation and energy costs,” Manchin said in a statement. “Her previous public statements have failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation’s critical energy needs.”
Raskin said in a 2020 op-ed in The New York Times that Congress should have excluded energy companies from its pandemic-lending facilities.
Senate Banking Republicans criticized Raskin for that and other statements she had made about the financial risk posed by climate change and the duty of financial regulators to address it.
They later boycotted a committee vote to advance her nomination, citing her involvement with a financial technology company that was granted access to the Fed’s payment system while she was a member of the company's board. Raskin and the Federal Reserve Bank of Kansas City, which approved Reserve Trust’s master account, denied any improper conduct.
“The Senate’s bipartisan rejection of Sarah Bloom Raskin’s nomination sends a powerful message to the Fed, and to all financial regulators, that it is not their job to allocate capital or stray from their mission to pursue extraneous or politically charged campaigns," Senate Banking ranking member Patrick J. Toomey, R-Pa., said in a statement. "The Biden administration should nominate in her place an individual who will focus exclusively on implementing the Fed’s statutory mandates of stable prices, full employment, and supervision of bank holding companies.”
But Senate Banking Chairman Sherrod Brown, D-Ohio, issued a statement saying Raskin's opponents accepted the view of the gas and oil industry.
"Unfortunately, too many of my colleagues ignored the broad, bipartisan support from community bankers, top economists, cybersecurity experts, state banking regulators, consumer advocates, and so many others. Instead, they fell for talking points written by the oil and gas industry," he said. "Republicans engaged in a disingenuous smear campaign, distorting Ms. Raskin’s views beyond recognition and made unsubstantiated attacks on her character. Committee Democrats were united, and we did our jobs."
Without at least one Republican present, the Banking Committee was unable to take a vote last month to advance her nomination or those of four other Fed nominees, including acting Chairman Jerome Powell for a second term, Lael Brainard to be vice chair, and Lisa Cook and Philip Jefferson to join the board.
Toomey told reporters that Republicans were ready to vote on other nominees.
“Anytime the chairman wants to schedule a vote for the remaining nominees, I think Republicans will turn out in substantial numbers, and we'll cast our votes," Toomey said.
Raskin, who is married to Rep. Jamie Raskin, D-Md., was a member of the Fed board from 2010 to 2014, and left to become second-in-command at the Treasury Department until 2017. As vice chair for supervision, she would have been in charge of setting the Fed’s policy agenda.
Manchin was a member of the Senate when it confirmed Raskin for the Treasury post in a voice vote.
Biden urged the Senate Banking Committee to move forward with votes on the other four nominees.