The Senate Banking Committee on Wednesday advanced three Federal Reserve nominees, including Jerome Powell for a second term as chairman, ending a weekslong boycott by committee Republicans.
Sarah Bloom Raskin’s withdrawal from consideration to be the Fed’s vice chair for supervision Tuesday paved the way for Wednesday evening votes on Powell, Fed Governor Lael Brainard to be vice chair, Philip Jefferson and Lisa Cook to join the Fed board, and Sandra Thompson to lead the Federal Housing Finance Agency.
“I'm eager to get President Biden's talented, qualified nominees to the Federal Reserve Board on the job,” Senate Banking Chairman Sherrod Brown, D-Ohio, said. “Since President Biden took office we've made tremendous economic progress as a country. The nominees we vote on today are crucial to continuing that progress.”
The committee voted 23-1 to advance Powell, with Sen. Elizabeth Warren, D-Mass., dissenting. Powell has been acting chairman since his term as chairman expired in early February. Warren has long criticized the Fed’s approach to regulating Wall Street.
The committee voted 16-8 to advance Brainard and 24-0 to advance Jefferson. If confirmed, Jefferson, an economics professor and vice president for academic affairs at Davidson College in North Carolina, would be the fourth Black man to join the Fed.
But the panel deadlocked 12-12 on advancing Lisa Cook, who if confirmed would be first Black woman to join the Fed board. The Senate could bring her nomination to the floor with a petition to discharge it from committee.
Committee ranking member Patrick J. Toomey, R-Pa., criticized Cook at her February confirmation hearing as too timid on fighting inflation and lacking adequate experience in macroeconomic policy.
Cook, a professor of economics and international relations at Michigan State University, said at the hearing last month that she agreed with the steps the Fed had taken so far, and would examine data available when future decisions must be made. She also defended her credentials.
“I certainly am proud of my academic background. I know that I have been the target of anonymous and untrue attacks on my academic record,” she said. “I have a Ph.D. in economics from the University of California, Berkeley. I specialized in macroeconomics and international economics.”
Brown drew attention to the diversity the nominees would bring to the Fed, if confirmed.
“This would make the first time ever that two Black governors have served on the board at the same time,” Brown said. “They know economic growth only matters if it shows up beyond corporate balance sheets. What I love about this team is it’s not only racially diverse and gender diverse, it's experience and idea diverse with various economic disciplines and much less top-down economics than we see in the Federal Reserve.”
The committee voted as the Fed faces decisions this year and next about addressing decades-high inflation. The Consumer Price Index showed inflation reaching a 7.9 percent annual rate last month, the highest annual pace since January 1982, according to the Bureau of Labor Statistics.
The Fed said Wednesday it would raise interest rates by a quarter of a percent to slow rising prices.
The panel also voted 13-11 to advance Thompson to lead the Federal Housing Finance Agency.
Wednesday’s vote brought to an end the Republican boycott of a vote on Raskin’s nomination to lead the Fed’s policy agenda.
Committee Republicans skipped a February meeting to vote on the nominees, saying they needed more information from Raskin about her involvement with Reserve Trust, a Colorado-based fintech company that was granted a Fed master account while she was on the company’s board of directors. Raskin and the Federal Reserve Bank of Kansas City, which approved the Fed account, denied any misconduct.
Without at least one Republican present, the committee couldn’t hold an official vote on the nominees. The Democrats voted anyway, acknowledging that it was meaningless. Brown refused to schedule votes on the others without a vote on Raskin.
But Raskin’s chances took a nosedive Monday, when Sen. Joe Manchin III, D-W.Va., said he would oppose her confirmation, citing her stance on climate change and financial risk.
The stalemate ended Tuesday when President Joe Biden accepted Raskin’s withdrawal of her nomination.
Toomey addressed the boycott in an opening statement, saying it should be Congress, not regulators, that makes decisions regarding climate change and other complicated issues.
“I know we will not agree on the case of Sarah Bloom Raskin,” Toomey said. “I hope something we could agree on is how important it is that the challenging decisions that inevitably involve painful trade-offs are decisions that should be made in the democratic society by people who are accountable to the voters.”