Democratic lawmakers in both houses of Congress couldn’t seem to resist the temptation to lobby for movement on five stalled Federal Reserve nominations as one of the nominees — the central bank’s chair pro tempore, Jerome Powell — made a semiannual appearance to discuss monetary policy this week in front of the Senate Banking and House Financial Services committees.
And the jabs came immediately.
"Senate Republicans have chosen to unilaterally block [Powell’s] confirmation … and the historic confirmation of diverse and highly qualified nominees to the board of governors, leaving key leadership positions at the Federal Reserve vacant when it is tackling an array of economic issues, including those arising from Russia’s invasion of Ukraine," the House panel’s chair, Maxine Waters, D-CA, said in opening remarks Wednesday. "This will undermine our recovery from the pandemic and place our economy and financial stability at risk."
The committee’s ranking member, Rep. Patrick McHenry, R-NC, wouldn’t have it.
"This is the House. The Senate does nominations," he said. "If we wish to have an opinion and direct the Senate, we should go run for the Senate."
Powell, for his part, said, "I prefer not to get into that process, other than as a nominee."
When Rep. Pete Sessions, R-TX, asked Powell how lawmakers could help the Fed, Waters interjected: "[You] could help Mr. Powell by asking your friends on the Senate side to confirm his appointment."
Senate Banking Committee Republicans skipped a scheduled Feb. 15 vote on all five current Fed nominees, denying Democrats a quorum. The protest stemmed from allegations Sen. Cynthia Lummis, R-WY, raised during a nomination hearing for Sarah Bloom Raskin, President Joe Biden’s choice to serve as the central bank’s vice chair for supervision — specifically, that Raskin used her influence as a former Fed governor to help Colorado fintech Reserve Trust gain a Fed master account. Raskin served on the company’s board.
Raskin submitted a written statement to the Senate panel’s ranking member, Pat Toomey, R-PA, indicating she did "not recall any communications I made to help Reserve Trust obtain a master account." But Toomey asserted in a letter that Kansas City Fed President Esther George told him Raskin called her directly about the matter.
Democrats scrapped a plan to revisit that Feb. 15 vote Wednesday. However, the Senate banking panel’s chair, Sherrod Brown, D-OH, pleaded his case during Powell’s appearance Thursday.
"In a time of deep economic uncertainty — where democracies across the world are threatened by authoritarian strongmen — we must ensure the Fed is operating at full capacity," he said. "It’s vital that we live by our values. … That means a commitment to the rule of law. A commitment to democratic participation. And a commitment to independent institutions that allow our society to function, like the Federal Reserve."
Toomey, at Thursday’s hearing, asked Powell whether the Federal Open Market Committee is "today, right now, fully capable of determining monetary policy, and the Fed, as a whole, is fully capable of implementing that policy."
"Yes," Powell said. "We will do our jobs."
Another committee Republican, Sen. Mike Crapo of Idaho, asked if Powell had the "full ability to chair the board while we wait for the handling of your nomination."
Powell, whose renomination as Fed chair is caught up amid the Raskin protest, responded affirmatively.
The panel’s Republicans on Thursday sent Biden a letter reinforcing their refusal to budge on Raskin, citing the nominee’s "lack of candor" with regard to Reserve Trust’s master account, according to Bloomberg.
"Without greater insight into Ms. Raskin’s past activities, we cannot, in good faith, support the advancement of her nomination process," the lawmakers wrote.
But the White House, too, has chimed in on the Raskin holdout.
Biden called out the Senate banking Republicans during his State of the Union address Tuesday.
"What are we waiting for? Let’s get this done," Biden said of his economic agenda. "And while you’re at it, confirm my nominees to the Federal Reserve."
White House Press Secretary Jen Psaki, doubled down on that stance at a Friday briefing, Bloomberg reported.
“They’re not doing their job here, which is just to show up,” Psaki said. “They don’t have to vote for her. They just have to be in the room."
The master account issue is not the only sticking point Senate banking Republicans have with Raskin. They’ve also expressed concern that, if confirmed, Raskin would use her position to advance a stricter stance toward lending to fossil-fuel companies, which have a comparatively large carbon footprint.
But the lawmakers made it clear Thursday that it was the question of ethical conduct, not climate, that has spurred their Raskin boycott.
"Our actions to deny a quorum were not the result of Ms. Raskin’s radical public comments and beliefs about using federal financial supervisory powers to advance climate change policy," the lawmakers wrote.
That did not seem to sway the White House.
“All five of our nominees, including Sarah Bloom Raskin, are well qualified for these positions and we’re calling on the Senate to confirm them as soon as possible," Psaki said Friday.