Liberals 1, Larry Summers 0 (and what it says about Democratic politics)

September 16, 2013

Larry Summers will not be the next chairman of the Federal Reserve. Count it as another victory for the liberal wing of the Democratic Party and a reflection of the reality that Democrats are far from immune for intraparty tension.


Larry Summers. (Andrew Harrer/Bloomberg)

"I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation's ongoing economic recovery," Summers, the former Clinton administration treasury secretary and top White House economic adviser to Obama wrote the president Sunday.

Translation: I would have had a heck of a time getting confirmed by the Senate, in large part because of opposition from our own party, Mr. President.

Let's take a closer look at why.

While Summers is one of Obama's closest confidants on the economy and a major player in the administrations of the last two Democratic presidents, the party's liberal base has viewed him with skepticism. His deregulatory policies represent a big strike against him in their eyes. And his controversial comments about women's abilities in math and science haven't helped him with women's groups.

While Summers had been widely viewed as Obama's top choice to replace Ben Bernanke, he was never an official selection. Yet he faced a tough preemptive strike on Capitol Hill well before he could even get to that point.

Three Democratic members of the Senate Banking Committee already committed to voting against him. And that's not including Sen. Elizabeth Warren (D-Mass.) -- arguably the party's biggest champion of tightening financial regulations -- who has expressed concerns about Summers. Warren's opinion matters; she has an army of loyal supporters across the country.

What's more, Obama received letters from dozens of House and Senate Democrats urging him to tap Federal Reserve Vice Chair Janet Yellen instead. And the president felt compelled to defend Summers in a July meeting with Democrats on Capitol Hill, because of all the backlash he'd faced.

Add it all up, and the White House would have likely had to go hunting for Senate Republican support for Summers. It would have been far from a sure bet that Obama could have gotten what he needed from a GOP that has sought to stymie him at every turn. And the asks would have come on the heels of a contentious debate over Syria and what is likely to be a heated debate over keeping the government funded.

So what does the Summers saga tell us about politics? Three things.

One, the liberal base of the Democratic Party is making its voice heard. Look to the debate over Syria for another recent example. Even as the president made an impassioned plea for Congress to approve military action, many liberal members of the president's own party rebuffed him.

Two, it's a reminder that while the GOP is riddled with squabbles often pitting the right and center-right against each other on spending and social issues, Democrats too are willing to take the fight to their own. The fact that Summers was a perceived favorite of Obama didn't prompt the political left to bow to the president's preferences. If anything, the realistic prospect of a Summers nomination hardened their opposition.

Three, it shows the left has found another pressure point where it can exert some real influence: the battle over monetary policy and the financial sector. The rise of Warren and the scuttling of Summers's would-be bid are two successes liberals will hope to build on.

And as the White House learned, they can pack a punch.

Sean Sullivan covers national politics for “The Fix.”
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Ed O'Keefe | September 16, 2013