Chairman Sherrod Brown (D-OH) questions Treasury Secretary Janet Yellen and Federal Reserve Chairman Powell during a Senate Banking, Housing and Urban Affairs Committee hearing on the CARES Act, at the Hart Senate Office Building in Washington, DC, September 28, 2021.
Kevin Dietsch | Pool | Reuters
A Republican boycott Tuesday held up a Senate committee vote on the appointment of a top banking regulator and Federal Reserve Chairman Jerome Powell.
Sen. Sherrod Brown, head of the Senate Banking Committee, said the panel could not hold a formal vote because the GOP absence meant a lack of a necessary quorum. The vote was to send to the floor the names of Powell, Sarah Bloom Raskin, whom President Joe Biden nominated to be the Fed’s vice chair for supervision, and three other nominees.
“I will delay votes on these nominees. We will update you when we’ve rescheduled,” Brown said Tuesday afternoon. “Republicans have walked out on the American people.”
After making the announcement, Brown held an unofficial vote to drive home the point that Democrats support the president’s nominees. Sen. Elizabeth Warren, D-Mass., clarified that she backs all nominees except for incumbent Fed Chair Powell.
The delay throws the confirmation of five Fed nominees, including Powell and would-be Vice Chair Lael Brainard, into question. Democrats had hoped to vote for all five of them as a package, with Republican Powell balancing out original Democratic picks like Raskin. Biden chose the other two nominees, Lisa Cook and Philip Jefferson, for seats on the Fed’s board of governors.
The postponement also comes at a tense time for the nation’s central bank, which is widely expected to start raising interest rates in March to quell inflation levels not seen since the 1980s.
Committee ranking member Sen. Pat Toomey, R-Pa., announced earlier in the day that the GOP would boycott the nomination vote due to concerns about Raskin’s prior work for Reserve Trust, a fintech firm she worked for shortly after leaving the Obama administration.
The threat of a high-profile and protracted dispute over Fed nominees, who are supposed to be insulated from partisan politics, could theoretically push the White House to ditch Raskin. To date, the administration has supported its nominee and said there have been few choices better equipped to oversee the nation’s financial companies than Raskin.
“Sarah Bloom Raskin is one of the most qualified people to ever be nominated to serve on the Board of Governors of the Federal Reserve,” the White House said in an emailed memo Tuesday morning. “Despite her qualifications, Senators Pat Toomey and Cynthia Lummis over the last several weeks have lobbed unfounded and unfair attacks at Raskin related to her time on the Board of Directors of Reserve Trust.”
“If our Republican colleagues were as concerned about inflation as they claim to be, and as certainly we are, then they would come to the markup and make sure that the Fed has the personnel to ultimately have the monetary policy that can rein in inflation,” said Sen. Robert Menendez, a Democrat from New Jersey.
Darin Miller, a spokesman for Lummis, said he found that criticism lacking. The Wyoming senator was first to question Raskin over her work for Reserve Trust during her nomination hearing earlier in February.
“Dems attacking Banking Rs over inflation while trying to force a vote on hyper-political Raskin is laughable,” Miller wrote on Twitter as Democrats announced the delayed vote. “If they cared about inflation, a fight over Raskin would not be their top priority today – getting a vote on Powell, etc. would.”
The Banking Committee’s Republicans have repeatedly criticized Raskin and her previous work for Reserve Trust.
Late last week, Toomey said in a letter Raskin lobbied Kansas City Fed President Esther George in 2017 to advocate for the fintech company and its application for a special account at the central bank. The Fed previously denied Reserve Trust’s request for special access to the central bank’s payments system.
At the time she placed the call, Raskin had just left her role as the Treasury Department’s deputy secretary, a role she served in after more than three years at the Fed as one of its governors.
Following her personal intervention on the company’s behalf, the Kansas City Fed approved the company’s second request for an account in 2018. The Kansas City Fed claims that its reversal was not the result of Raskin’s call and that it followed all the usual protocols in evaluating Reserve Trust’s second application.
Republicans, who say they want more time to vet Raskin, do not suggest her action is illegal but that it is a flagrant example of the “revolving door” between politics and corporate interests. The revolving door model suggests that former government officials use their connections and clout in government to later lobby on behalf of businesses for a payout.
Toomey referenced those concerns in a statement Tuesday morning.
“Important questions about Ms. Raskin’s use of the ‘revolving door’ remain unanswered largely because of her repeated disingenuousness with the Committee,” Toomey said in a statement Tuesday morning.
“Committee Republicans aren’t seeking to delay her vote. We’re seeking answers,” he added.
Raskin, who received stock in Reserve Trust when she joined its board, sold her financial stake upon her 2019 departure from the company for about $1.5 million.
Reserve Trust’s exclusive master account remains the company’s single largest selling point to potential customers. It is the first thing the company says about itself on the homepage of its website.
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