Republicans to boycott vote on Sarah Bloom Raskin for Fed banking cop

Despite the focus on Raskin, Tuesday’s boycott halts progress on filling vacancies on the seven-seat Federal Reserve Board, including the confirmation process for Biden’s renomination of Fed Chair Jerome H. Powell, who has broad support among Republicans and Democrats.

“Last week, I told Chairman Brown that Republican Committee members would agree to proceed with a markup on all outstanding nominations except that of Sarah Bloom Raskin,” Patrick J. Toomey (R-Pa.) Said in a statement Tuesday, ahead of the 2:15 pm ET vote.

“All senators – not just Banking Republicans – deserve straightforward and honest answers from Ms. Raskin before having to cast a vote on her nomination, “Toomey added.” Her fitness to serve, her judgment and her probity are of utmost importance because Ms. Raskin is being considered for a 10-year term at the nation’s independent central bank and foremost financial regulator. This is not a garden-variety political appointment. ”

Republicans have long criticized the Fed and White House for not moving fast enough to stop inflation, which has risen to its highest level in 40 years. But now they are poised to block Biden’s moves to fill open spots on the Fed board as it grapples with soaring inflation and the pandemic’s ongoing consequences for economic recovery. Biden has also nominated Fed Gov. Lael Brainard to be the Fed’s vice chair, and economists Lisa Cook and Philip Jefferson to be Fed governors.

Following the news of the GOP boycott, Senate Banking Committee Chair Sherrod Brown (D-Ohio) issued a stern rebuke of his Republican colleagues.

“Today, Ranking Member Toomey chose to abdicate his duty to the American people and put our economic recovery at risk, instead of doing his job and showing up to vote on Ms. Bloom Raskin, Dr. Cook, Dr. Jefferson, Gov. Brainard, and Chair Powell’s nominations, ”Brown said in a statement. “Americans depend on us to get these nominees on the job as soon as possible. If my colleagues are as concerned about inflation as they claim to be, they will end the theatrics and show up today to do their jobs. “

Toomey has also criticized the central bank and the Fed’s network of regional banks for their research and attention to climate change and racial inequity – areas that Toomey says are beyond the Fed’s narrow mandate. Yet Republicans have generally been more supportive of Biden’s other nominees, especially Powell.

On Tuesday, Senate Minority Leader Mitch McConnell (R-Ky.) Said he would be meeting with Powell later on Tuesday but expressed concern over Biden’s other nominees.

“I would urge President Biden to find a better, more mainstream, more bipartisan candidate to serve this crucial institution,” McConnell said of Raskin.

GOP attention on Raskin ratcheted up since her confirmation hearing, when she was questioned by Sen. Cynthia M. Lummis (R.-Wyo.) About her time on the board of a Colorado payments firm, Reserve Trust. Raskin joined the Reserve Trust board after her time as a Fed governor, where she served from 2010 to 2014, and as deputy secretary to former president Obama’s Treasury Department, where she served from 2014 to 2017.

In 2017, the Kansas City Fed denied the Colorado firm access to what’s known as a Fed master account, which gives banks direct access to the Fed’s payment systems. But Reserve Trust was then granted access a year later. During the confirmation hearing, Lummis asked Raskin whether she used personal contacts from her regulatory background to help Reserve Trust secure its account.

Raskin, during the hearing, repeatedly denied any impropriety. And last week, the Kansas City Fed issued a letter outlining its decision to grant Reserve Trust an account.

The Kansas City Fed said that before 2018, Reserve Trust did not meet the proper requirements to be granted access to an account. But after the firm changed its business model, among other changes to state banking law, the Kansas City Fed approved the request.

In the run-up to her nomination, Democrats had urged Biden to tap a regulator with a deep legal background and focus on climate change’s risks to the financial system. In addition to focusing her recent work in academia on climate issues, Raskin has called on regulators to examine how they can address climate change in their work.

During her confirmation hearing, she outlined her approach to the Fed’s regulation and supervision of banks, saying that banks choose their borrowers – not the Fed – and that it would be inappropriate for the Fed to make credit decisions and allocations. Raskin also said that any actions from the Fed would have to be within its defined mandate, as opposed to encroaching on turf meant for elected lawmakers.

“I understand the role. I understand the law, ”Raskin said at her hearing earlier this month.

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