Jan 3, 2022 - Politics & Policy

Scoop: Biden plans to give Warren a win with Fed vice chair pick

Sarah Bloom Raskin is seen posing for a portrait.

Sarah Bloom Raskin. Photo: Tom Williams/CQ Roll Call

Sarah Bloom Raskin has emerged as the leading candidate to be President Biden’s choice for vice chair of supervision at the Federal Reserve, with an announcement as early as this week, people familiar with the matter tell Axios.

Why it matters: By settling on Raskin, a former deputy Treasury secretary, for the powerful bank regulator position, Biden is giving progressive senators like Elizabeth Warren (D-Mass.) a policy and personnel win on a position about which they care deeply.

  • He's also avoiding a potentially perilous confirmation fight in a 50-50 Senate.
  • Raskin, currently a law professor at Duke University married to Rep. Jamie Raskin (D-Md.), served as a Fed governor before she joined President Obama’s Treasury department. She's been confirmed by the Senate twice, the last time by a voice vote.
  • A White House official said no final decisions have been made.

The big picture: After Biden announced in November his intent to renominate Fed Chair Jay Powell, a Republican, progressives made it clear they wanted a candidate more in line with them ideologically for the powerful bank regulator slot.

  • “It’s no secret I oppose Chair Jerome Powell’s renomination, and I will vote against him," Warren said in November. "Powell’s failures on regulation, climate and ethics make the still-vacant position of vice chair of supervision critically important."
  • Warren is supportive of Raskin's candidacy, according to a person familiar with the matter.

Between the lines: Biden also had been considering Richard Cordray, who helped Warren stand up the Consumer Financial Protection Bureau, for the vice chair position.

  • But Republicans warned against naming him, promising a bruising confirmation fight.

Driving the news: Biden has three open seats on the Federal Reserve, which will take center stage in 2022 in the fight against inflation.

  • He’s considering Lisa Cook, a former Council of Economic Advisers official under President Obama and current professor at Michigan State University, for one of those slots, Axios has reported.
  • Philip Jefferson, a former Fed economist and now a professor and dean at Davidson College, also is under consideration for the other open seat, according to the Wall Street Journal.

When Biden announced Powell as his pick for the top job, as well as Lael Brainard to serve as the other vice chair, he promised his next nominees would “bring new diversity to the Fed, which is much needed and long overdue, in my view.”

  • Both Cook and Jefferson are Black.
  • The president is expected to announce a slate of nominees for the three positions, according to people familiar with the matter.

Go deeper: Biden has had a challenge filling some key bank regulator positions, including the Office of the Comptroller of the Currency.

  • Centrist Democratic senators rejected Biden's pick for the OCC, Saule Omarova, leading her to bow out.
  • The current FDIC chair, Jelena McWilliams, a key bank regulator appointed by former President Trump, will step down after fighting with Biden appointees.
  • This will give Biden an opportunity to nominate a Democrat for the position.
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