Sarah Bloom Raskin, nominated to be vice chairman for supervision and a member of the Federal Reserve Board of Governors, speaks before 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
Sen. Joe Manchin, the most conservative Democrat in the Senate, said Monday that he opposes one of President Joe Biden’s nominees to the Federal Reserve, leaving her candidacy to join the central bank with the slimmest of hopes.
“I have carefully reviewed Sarah Bloom Raskin’s qualifications and previous public statements. Her previous public statements have failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation’s critical energy needs,” Manchin said in a statement.
“I have come to the conclusion that I am unable to support her nomination to serve as a member of the Federal Reserve Board,” he added.
Manchin’s formal opposition throws serious doubt on Raskin’s bid to be the Fed’s next vice chair for supervision, one of the most powerful banking regulators in the world. Raskin is a former Fed governor and served as the deputy Treasury secretary in the Obama administration.
While it’s possible she could garner support from a moderate Republican, a Senate split 50-50 means a single Democratic defection can imperil presidential nominations.
The White House said Monday that many of the most intense attacks against its candidate have come from those with close ties to the energy industry.
“Sarah Bloom Raskin is one of the most qualified people to have ever been nominated for the Federal Reserve Board of Governors,” a White House spokesperson told CNBC. “She has earned widespread support in the face of an unprecedented, baseless campaign led by oil and gas companies that sought to tarnish her distinguished career. We are working to line up the bipartisan support that she deserves, so that she can be confirmed by the Senate for this important position.”
A spokesperson for Sen. Sherrod Brown, the Ohio Democrat who serves as chair of the Senate Banking Committee, offered a similar outlook.
“Senator Brown is working to move forward Ms. Bloom Raskin’s nomination with bipartisan support, as Ms. Bloom Raskin has earned twice before,” Brown’s office told CNBC in an email.
Manchin, who last week said that his own party should advance Biden’s four other Fed nominees without Raskin, has for weeks worked to support the U.S. energy industry as oil and gas prices climb after Russia’s invasion of Ukraine.
Biden has also nominated Jerome Powell to a second term as Fed chair, chosen Lael Brainard as vice chair, and picked Lisa Cook and Philip Jefferson as Fed governors. A spokesperson for Senate Majority Leader Chuck Schumer, D-N.Y., did not immediately respond to CNBC’s request for comment.
Sen. Joe Manchin (D-WV) listens as U.S. President Joe Biden delivers his first State of the Union address to a joint session of Congress, in the U.S. Capitol in Washington, DC, U.S., March 1. 2022.
J. Scott Applewhite | Reuters
Manchin’s statement Monday suggested that he doesn’t believe Raskin, who has previously called for stronger climate policies and critiqued the energy sector, could serve on the Fed without politicizing her decisions.
“The Federal Reserve Board is not an institution that should politicize its critical decisions,” Manchin said. “The time has come for the Federal Reserve Board to return to its defining principles and dual mandate of controlling inflation by ensuring stable prices and maximum employment. I will not support any future nominee that does not respect these critical priorities.”
Many of Manchin’s top donors include executives in the coal, oil and gas industries. Within the past year, Manchin has received donations from Ryan Lance, CEO of ConocoPhillips, Vicki Hollub, CEO of Occidental Petroleum, and R. Lane Riggs, the president of Valero Energy.
His remarks cap a weekslong standoff between Democrats and Republicans on the Senate Banking Committee, where the GOP has boycotted a vote on the president’s candidates out of opposition to Raskin.
Republicans, led by Banking Committee ranking member Sen. Pat Toomey of Pennsylvania, have said they are open to holding a vote on Powell, Brainard, Cook and Jefferson. But Democrats, led by the White House and Brown, have said they will hold a vote only if all of the nominees are included.
“As Senator Manchin suggested today, Ms. Raskin’s past advocacy for having the Federal Reserve allocate capital and discriminate against traditional energy companies would not only politicize the Fed, but weaken economic growth at a crucial moment in history,” Toomey said in a press release Monday afternoon.
The two sides have fought since early February over Raskin’s fate.
Republicans began their attacks on Raskin during her confirmation hearing on Feb. 3. Several GOP senators criticized her views on climate policy and what many in the energy sector fear could be the Fed’s eventual move to discourage banks from lending to fossil fuel companies.
At that hearing, Sen. Cynthia Lummis, R-Wyo., also brought up Raskin’s prior work for fintech company Reserve Trust. The fintech business — like many others — was in 2017 trying to acquire a so-called master account at the Fed, which would grant it unprecedented access to the central bank’s payments system.
After Raskin’s personal intervention later that year, just months after she left her job as deputy Treasury secretary, the Kansas City Fed approved the company’s second request for an account in 2018.
Democrats have fired back at every turn and argue that the GOP’s revolving door concerns are a facade for the true reason they oppose Raskin: her prior research into how financial institutions could favor lending away from debt-laden fossil fuel producers.
The White House argues that there a few people more qualified to serve as the Fed’s top banks regulator given Raskin’s long history in government and prior work at the Treasury Department and the central bank. Many Obama-era administration officials, including former Treasury Secretary Jack Lew, have supported her nomination.
He and other economists note that the partisan dispute comes at a precarious time for the Fed, which is expected to raise interest rates later this week. With inflation running at a 7.9% annualized rate, economists say the central bank needs to crack down on rising prices without throwing the economy into a recession.
“As our nation continues its economic recovery from the pandemic, deals with rising inflation, and faces an end to decades of peace and security in Europe with Russia’s unjust invasion of Ukraine, we need the Federal Reserve to be at full force,” Lew wrote earlier in March.