Chairman Joe Manchin, D-W.Va., conducts a Senate Energy and Natural Resources Committee hearing on domestic and international energy price trends, in Dirksen Building on Tuesday, November 16, 2021.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
West Virginia’s Joe Manchin, the most conservative Democrat in the Senate, is complicating President Joe Biden’s plan to place a former federal regulator and climate policy advocate on the Federal Reserve board.
Senate Republicans are holding up a slate of five Fed nominees the White House has asked to clear over one of them: Sarah Bloom Raskin. For weeks, Republicans have said they need more time to question Raskin, a former Fed governor and deputy Treasury secretary.
But they have offered to immediately clear the other four nominees.
Now, after a weekslong standoff, Manchin is saying his party should consider the Republican offer, enough to make Democrats nervous in an evenly split chamber where they can’t afford to lose one vote.
“If they’re willing to move four out of five? Take it and run with it. It’s a win,” Sen. Joe Manchin said. “I’ll take a win any time I get it.”
His comments, first reported by Politico and confirmed by CNBC, agitate an ongoing political battle led by Senate Banking Committee Chairman Sherrod Brown, D-Ohio, and his Republican counterpart, Sen. Pat Toomey of Pennsylvania.
The two have clashed since early February over Biden’s choice of Raskin to serve as the Fed’s vice chair for supervision, one of the country’s most powerful bank regulators.
Toomey, the banking committee’s ranking member, persuaded his GOP colleagues to boycott a vote on the president’s candidates to the central bank out of opposition to Raskin and her outspoken support for climate policies and criticism of the U.S. energy industry.
Republicans have raised questions about Raskin’s work for financial technology company Reserve Trust after it managed to obtain unique access to the Fed’s payments system during her tenure. Democrats say their candidate has answered hundreds of questions, has been more than forthcoming with the Republicans, and see their qualms over Reserve Trust as a front for their true energy-based worries.
The GOP says they are open to a vote on Biden’s other four nominees, including Fed Chair Jerome Powell and Fed Governor Lael Brainard.
But Brown and the White House are standing by Raskin, saying any vote on the president’s Fed nominees must include them all.
The panel can’t move the nominations to a full vote in the Senate without a quorum in the committee, White House press secretary Jen Psaki said Thursday, adding that the Republicans’ refusal to attend prevents the majority from moving forward because of procedural rules.
U.S. Senator Sherrod Brown (D-OH) chats with Sarah Bloom Raskin, who is nominated to be vice chairman for supervision and a member of the Federal Reserve Board of Governors, and her daughter Hannah Raskin, following a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Capitol Hill in Washington, D.C., U.S., February 3, 2022.
Ken Cedeno | Reuters
“It’s important to note that it is not a lack of votes on the committee to move these nominees forward. It is a lack of willingness of Republicans to show up to the committee to actually vote,” Psaki said. “Our hope is that the banking committee members will show up and do their jobs and vote or not vote.”
The partisan fight comes as the Fed prepares to begin what’s expected to be a cycle of interest rate hikes to combat a spike in prices nationwide. The Labor Department reported Thursday that inflation rose 7.9% in the 12 months ended February, well above the central bank’s 2% target.
A string of hot inflation prints has not only caused angst for consumers at gas stations and supermarkets across the country, but also forced the Fed to accelerate its plans to cut back on its Covid-era monetary policies and prepare to raise borrowing costs to keep the economy from overheating.
The Federal Open Market Committee, the Fed’s policymaking arm, has left little doubt as to its plans to hike the overnight lending rate by 25 basis points when it meets next week. A basis point is equal to 0.01%.
“Newly released economic data makes it crystal clear: Republicans need to do their jobs and vote on these critical nominees so that we can tackle inflation and address our global economic crisis,” a spokeswoman for Brown told CNBC.
But in a Senate split 50-50, Manchin’s pressure on fellow Democrats to take the GOP deal on the Fed nominees suggests that the majority may not be unified.
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Though Manchin isn’t on the banking committee, he would prove a critical vote to confirm Raskin on the Senate floor. The West Virginian — who counts several energy executives among his top political donors — remains undecided on Raskin’s candidacy despite his support for the GOP deal for a slate of four nominees.
But while the partisan bickering has continued for weeks, the political and economic environment surrounding it has changed.
Since Raskin last testified before the committee on Feb. 3, Russia has embarked on its invasion of Ukraine, sending crude oil prices to multiyear highs. The spike in crude sent West Texas Intermediate crude futures to nearly $130 a barrel on Tuesday before the price retreated to around $110 on Thursday.
Republicans have seized upon the uptick in oil prices — and the broader inflation data — to argue that nominations to the Fed ought to favor stricter monetary policy and support the U.S. energy sector to keep petroleum prices from eroding American paychecks.
Raskin, they say, isn’t the right choice now given her prior call to curb emergency lending to energy companies.
To quell inflation, “the administration can start by reversing its disastrous anti-energy policies,” Toomey wrote on Twitter following Thursday’s CPI print.
Biden should “restart the Keystone XL pipeline, expedite natural gas pipeline approvals, repeal its broad, punitive regulations on America’s oil and gas production and withdraw the nomination of Sarah Bloom Raskin,” he wrote.