Another day, another sign that Larry Summers will get the Fed job

Another day, another sign that Larry Summers will get the Fed job. The latest smoke signal went to CNBC's John Harwood, who reports that "a source from Team Obama told CNBC that Larry Summers will likely be named chairman of the Federal Reserve in a few weeks though he is 'still being vetted' so it might take a little longer."

Larry Summers might have a hard time in the Senate. (Photo by Jerome Favre/Bloomberg)
Larry Summers might have a hard time in the Senate. (Photo by Jerome Favre/Bloomberg)

My reporting suggests much the same (though I'm less certain of the timetable). The White House's economic team is lockstep behind Summers. And President Obama's mind has long been pretty much made up. His preference for Summers comes from two years of working with the guy every single day and two more years in which they were routinely in touch. It's not a soft lean.

If Summers doesn't get the job it won't be because the White House doesn't want to choose him. It'll be because they're worried he won't clear the Senate.

The question is whether Summers will really cause a revolt among Senate Democrats or if it's all just talk. Reuters points out that Summers' first hurdle would be in the Banking Committee. Democrats hold a 12-10 majority there, but three of those Democrats -- Jeff Merkley (Ore.), Sherrod Brown (Ohio) and Elizabeth Warren (Mass.) -- are skeptical of Summers. If they refuse to vote for his nomination then that means the Obama administration needs to find some Republicans willing to make up the shortfall.

The wider Senate poses problems, too. Democrats have 54 votes -- six short of the number needed to shut down a filibuster. If they lose a handful of progressives on the cloture vote then they could need 10 or so Republicans to make up the difference. Securing that many Republican votes under normal circumstances is difficult. But these wouldn't be normal circumstances.

Senate Minority Leader Mitch McConnell (R-Ky.) will see an opportunity to deal the Obama administration a substantial and humiliating defeat on a key nomination. Sen. Rand Paul (R-Ky.)will see an opportunity to grandstand against the Fed. Every Republican will see an opportunity to hammer the administration's policies on stimulus and housing. And that's before anyone gets to scandals in Summers' past, like the comments on women in the sciences or the Shleifer affair, not to mention the consulting and speaking fees he'll need to report on his financial disclosure forms. Will those Republican votes really materialize for Summers?

All that said, it's worth noting that Janet Yellen isn't a sure thing, either. Her reputation as a dove would spook Republicans. Her past comments on inflation aren't explosive, but they're enough for skeptical senators to conclude, correctly, that she's more worried about unemployment and less worried about inflation risks than recent chairs. And she's had little experience before the klieg lights of the Senate, which increases the possibility that she could make a damaging flub under harsh questioning.

But Yellen would be unlikely to lose any Democratic votes and she's not tied to the Obama administration's economic policies in the way Summers is, so it's hard to imagine her inspiring much bloodlust among Republicans, either.

In the end, my guess is Summers would get confirmed. But I'm more uncertain about it than I am with Yellen, or Don Kohn, or even Stan Fischer.

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Dylan Matthews · August 27, 2013