Sarah Bloom Raskin’s nomination to the Federal Reserve Board appeared all but doomed on Monday after Sen. Joe Manchin III, a key Democratic vote, said he opposed her because of her stance on energy in an era of inflation.
Raskin’s nomination to the job of vice chair for supervision — the Fed’s top banking regulator — was already under pressure, with Republicans initially opposing her candidacy over her focus on climate change and its threat to financial stability.
In recent weeks, her confirmation has hung in the balance after Republicans on the Senate Banking Committee boycotted her confirmation vote, pointing to her time on the board of a Colorado payments firm that got access to a Fed payments systems during her tenure on the company’s board. The boycott has held up not only her path forward but also votes on President Biden’s other picks for the Fed.
The White House and Democrats on the Banking Committee have stood up for Raskin, saying Republicans’ fixation on this part of her record is a ploy to stall her nomination indefinitely.
“She’s an extremely well-qualified person,” Sen. Ben Cardin (D-Md.) said Monday. “I strongly support her. ... We’re going to fight and do everything we can to get her confirmed.”
But after losing Manchin’s support, she faces a fraught, if not impossible, path to confirmation in a tightly divided Senate.
In a statement, White House spokesman Chris Meagher noted that Raskin won bipartisan support for her roles at the Fed and the Treasury Department.
“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,” Meagher said. “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.”
White House press secretary Jen Psaki on Monday said Manchin let the White House know about his opposition to Raskin before making his public announcement.
Sen. Patrick J. Toomey (R-Pa.) and other GOP lawmakers have attacked her view that the Fed should do more to mitigate the financial risks of climate change, including by potentially changing the way it regulates energy producers. Manchin — who represents West Virginia and its high concentration of energy jobs — is adding his high-profile voice to those warning the Fed against tackling climate issues.
In her writing and public remarks, Raskin has highlighted the economic and financial stability risks tied to climate change. In a column published in September, she wrote that “financial regulators must reimagine their own role so that they can play their part in the broader reimagining of the economy.”
Raskin’s supporters want to see the Fed thoroughly evaluate how more intense and frequent climate disasters, from wildfires to hurricanes, could harm the health of banks or ricochet through the financial system. They are also hoping the Fed will move toward encouraging banks to reduce their exposures to climate risks.
Democrats hoped Raskin would bring expertise to climate policy issues. But they also note that Raskin’s views are not out of step with Fed Chair Jerome H. Powell or others — often just more specific and with a greater sense of urgency.
Now, with Raskin’s nomination compromised, Democrats and the White House will have to weigh whether to select a new candidate or try to confirm Biden’s other picks. The Republican boycott has kept Powell from being renominated and Fed governor Lael Brainard from being elevated to vice chair. Biden’s nominees for two seats on the Fed board — economists Lisa Cook and Philip Jefferson — also have yet to be confirmed.
Republicans on the Banking Committee, led by Toomey, have said they would readily vote on Powell’s renomination and the other nominees. That leaves Democrats to decide whether to siphon off Raskin’s nomination and move forward with the rest of the slate.
“We need to have the Fed working,” Sen. Lisa Murkowski (R-Alaska), who opposes Raskin’s nomination, said Monday. “I think they better start looking for somebody quickly.”
Speaking Monday on Bloomberg TV as the news of Manchin’s opposition broke, Toomey said he was “not aware of any Republican support” for Raskin. Sen. John Thune (R-S.D.), the minority whip, said it was “unlikely” there would be any Republicans backing support. Sen. Susan Collins (R-Maine) said “there’s no path forward” and raised concerns about Raskin’s association with the Colorado payments firm, Reserve Trust.
“I talked with her on the phone today at some length, and I’m just surprised that an individual of her intellect and experience has not been more forthcoming on a call that she made on behalf of Reserve Trust to the Fed to get a master account,” Collins said.
GOP attention on Raskin ratcheted up after her confirmation hearing, when she was questioned by Sen. Cynthia M. Lummis (R-Wyo.) about her time on the board of Reserve Trust. Raskin joined the Reserve Trust board after previously serving as a Fed governor from 2010 to 2014.
In 2017, the Kansas City Fed denied the Colorado firm access to what’s known as a Fed master account, which gives banks direct access to the Fed’s payment systems. But Reserve Trust was then granted access a year later. During the confirmation hearing, Lummis asked Raskin whether she used personal contacts from her regulatory background to help Reserve Trust secure its account.
Raskin repeatedly denied any impropriety during the hearing. The Kansas City Fed has since issued a letter outlining its decision to grant Reserve Trust an account, saying that before 2018, Reserve Trust did not meet the proper requirements to be granted access to an account. Yet even that response added further controversy, with the Colorado Division of Banking disputing the Kansas City’s Fed characterization of how the application got approved.
Raskin previously served as deputy secretary of President Barack Obama’s Treasury Department from 2014 to 2017. She is also a distinguished fellow of Duke Law School’s Global Financial Markets Center.
Mike DeBonis and Seung Min Kim contributed to this report.