Biden's pick for Fed vice chair for supervision withdraws amid Republican objections

Former Federal Reserve Board governor Sarah Bloom Raskin has withdrawn her name for consideration as the central bank’s vice chair for supervision in an attempt to allow other nominations to move forward.

According to a Tuesday tweet from Washington Post journalist Seung Min Kim, Raskin sent a letter to U.S. President Joe Biden withdrawing as his nominee for the next vice chair for supervision of the Federal Reserve, citing “relentless attacks by special interests.” The letter referred to Republican lawmakers who, she said, have “held hostage” her nomination since February.

“Their point of contention was my frank public discussion of climate change and the economic costs associated with it,” said Raskin. “It was — and is — my considered view that the perils of climate change must be added to the list of serious risks that the Federal Reserve considers as it works to ensure the stability and resiliency of our economy and financial system.”

She added:

“The identification and prioritization of economic threats is not only within the mandate of the Federal Reserve but essential to the well-being of the country.”

Sarah Bloom Raskin’s withdrawal letter. Of note: “Had the boycotting senators simply challenged my belief in the need to integrate climate-based risks and costs into the financial regulatory apparatus, I would have welcomed the opportunity for this important discussion.” pic.twitter.com/IYphgLaISn
— Seung Min Kim (@seungminkim) March 15, 2022

Though Democrats currently hold a slight majority in the U.S. Senate with Vice President Kamala Harris able to act as a tie-breaking vote, West Virginia Senator Joe Manchin said on Monday that he was opposed to Raskin’s nomination, suggesting that the political party was unlikely to push through Biden’s pick without Republican support. On Tuesday, Senate minority leader Mitch McConnell reportedly called on the U.S. president to submit a new candidate for the Fed vice chair for supervision.

In February, lawmakers on the Senate Banking Committee were scheduled to vote on Raskin’s nomination as well as those of prospective Fed chair Jerome Powell, vice-chair Lael Brainard, and board members Lisa Cook and Philip Jefferson. However, Republican lawmakers reportedly boycotted the meeting over allegations by party members that Raskin lobbied the president of the Kansas City Fed in 2017 for access to its payments systems on behalf of Reserve Trust.

Raskin was a board member of the fintech firm at the time. In her withdrawal letter, she said the allegations “have been fully refuted and have no basis in law or fact.”

“Rather than a productive and informed discussion about climate and financial risk, the country was treated to diversionary attacks on my ethics and character,” said Raskin. “We are witnessing a drive to make financial risk a tawdry political issue.”

Pat Toomey, the ranking member of the Senate Banking Committee, said on Monday that Republicans were willing to move forward with voting on Powell, Brainard, Cook and Jefferson — but not Raskin. Without a vote before the full Senate, some of the nominees have been seemingly unable to assume the duties necessary for a fully-staffed Federal Reserve. The Fed named Powell as the chair pro tempore, pending Senate confirmation on Feb. 4.