Biden to withdraw nomination for Fed’s top bank cop
By Jeanna Smialek and Emily Cochrane
President Joe Biden withdrew his nomination of Sarah Bloom Raskin to serve as the Federal Reserve’s top bank regulator earlier this week, after a Democratic senator said he would join Republicans in voting against her, most likely dooming her chances of confirmation.
Raskin on Tuesday sent a letter to the White House asking to withdraw her name from consideration to be the Fed’s vice chair for supervision, according to two people familiar with the decision. The New Yorker earlier reported the existence of the letter.
“Sarah was subject to baseless attacks from industry and conservative interest groups,” Biden said in a statement released Tuesday afternoon.
While the end of Raskin’s candidacy will leave the Biden administration without the regulatory voice it was hoping for at the Fed Board, which oversees the nation’s largest banks, it could pave the way toward confirmation for the White House’s other Fed picks. Republicans had been stonewalling Raskin’s nomination, and in the process they were holding up the White House’s four other Fed nominees, including Jerome Powell, who is seeking confirmation to a second term as Fed chair.
Besides Powell, Biden has nominated Lael Brainard to be the Fed’s vice chair and two academic economists — Philip N. Jefferson and Lisa D. Cook — to serve as governors.
“I urge the Senate Banking Committee to move swiftly to confirm the four eminently qualified nominees for the Board of Governors,” Biden wrote in his statement.
Raskin almost certainly lacked sufficient support to pass the Senate. Republicans opposed her nomination to be vice chair for bank supervision and Sen. Joe Manchin D-W.Va., said Monday that he would not vote to confirm her.
In deciding to withhold support for Raskin, Manchin essentially doomed her chances in an evenly divided Senate. Democrats most likely needed all 50 lawmakers who caucus with their party to vote for Raskin, with Vice President Kamala Harris able to break ties.
Republicans had shown little appetite for placing a supporter of tougher bank regulation into a powerful regulatory role at the Fed and had also boycotted her nomination over her work in the private sector. Lawmakers refused to show up to a key committee vote to advance her nomination to the full Senate.
They had also seized on Raskin’s writings, saying her statements showed that she would be too aggressive in policing climate risks within the financial system and would overstep the unelected central bank’s boundaries.
“President Biden was literally asking for senators to support a central banker who wanted to usurp the Senate’s policymaking power for herself,” Sen. Mitch McConnell, R-Ky., the minority leader, said Tuesday. He added: “It is past time the White House admit their mistake and send us someone suitable.”
Manchin, who represents a coal state and has close ties to the fossil fuel industry, cited Raskin’s climate comments in explaining his opposition.
Raskin had written an opinion piece in September 2021 arguing that “U.S. regulators can — and should — be looking at their existing powers and considering how they might be brought to bear on efforts to mitigate climate risk.”
She did not argue that the Fed push beyond its legal boundaries, and the fierce backlash underlined that the issue of climate-related regulation is politically fraught territory in the United States.
The White House “may want to take some time, lick their wounds, and make sure they carefully think about who to nominate next,” said Ian Katz, a managing director at Capital Alpha Partners. He noted that he would expect the White House to name a new nominee before the midterm elections in November. “They’re not having success with candidates who do not sit well with moderate Democrats.”
“The lobbyists have power on Capitol Hill, and when they see their power threatened, they fight back hard — Sarah Bloom Raskin is just the latest casualty,” Sen. Elizabeth Warren, D-Mass., said in response to the news.