Jan 13, 2022 - Politics & Policy

GOP on Fed picks: Open to Brainard, wary of Raskin

President Biden is seen looking on as Fed Vice Chair-nominee Lael Brainard speaks.

President Biden listens as Lael Brainard speaks after he nominated her to be Fed vice chair in November. Photo: Alex Wong/Getty Images

Some Senate Republicans are open to voting for Lael Brainard, President Biden’s nominee to serve as vice chair of the Federal Reserve, but sound more concerned about Sarah Bloom Raskin.

Why it matters: GOP support for Brainard, a Fed governor whose confirmation hearing will be Thursday, would all but assure her confirmation. But questions about Raskin, Biden’s likely choice to serve as the Fed's top bank regulator, raise doubts for her.

What they are saying: “A president should be able to bring their team in. [Brainard] is part of his team,” Sen. Mike Rounds (R-S.D.), a member of the Senate Banking Committee, told Axios.

  • “I lean to supporting a nominee that the president has requested unless there's a reason not to,” he said, citing some concerns about her environmental positions.
  • “I am inclined to support her but would not make a final decision until I've had a chance to review the hearing transcript,” said Sen. Susan Collins (R-Maine).
  • While not on the committee, Collins is one of four Republicans still in the Senate who voted to confirm Brainard in 2012 by a vote of 61-31.

The big picture: Questions about inflation, which rose to 7% in Wednesday’s CPI report, dominated Fed Chair Jay Powell’s own confirmation hearing Tuesday. They'll also feature in Brainard's.

  • Tamping down inflation is the “most important task,” Brainard will tell the committee Thursday, according to prepared remarks.
  • “Inflation is too high, and working people around the country are concerned about how far their paychecks will go,” she will say.
  • Republicans also plan to press Brainard on how she’ll use the Fed to encourage carbon-neutral policies.

Go deeper: When Biden reappointed Powell to a second term in November, he picked him over Brainard — choosing to elevate her to the No. 2 slot. Both nominations require Senate confirmation.

  • Leading up to the Powell decision, Republicans publicly warned Biden against choosing Brainard for the top job, citing her more aggressive stance on using the Fed to fight climate change.
  • But GOP concern about using the Fed to pursue more carbon-neutral policies seems to have shifted toward Raskin, if she's to be seated as the vice chair for bank supervision.
  • “I've got concerns about whether [Brainard] would be sympathetic to the idea of using the Fed to try to implement climate policy, which is not the role of the Fed,” Sen. Pat Toomey (R-Pa.), the ranking member of the Banking Committee, told Axios.
  • “We know for sure that Sarah Bloom Raskin advocates using the Fed to allocate credit away from, say, the fossil fuel industry,” he said. “That's extremely disturbing.”

Flashback: Raskin, a former Fed governor and deputy Treasury secretary for President Obama, was confirmed twice by the Senate via voice vote, indicating there wasn’t any serious opposition.

  • Republicans are seizing on her more recent writings, according to Bloomberg.
  • She objected to allowing oil, gas and coal companies access to some of the emergency lending programs established in 2020 in response to the pandemic.
  • Raskin allies say Republicans are distorting her position.

The bottom line: Centrist Democrats, like Sen. Jon Tester (D-Mont.), helped scuttle Saule Omarova, Biden’s nominee to lead to Office of the Comptroller of the Currency.

  • Tester told Axios he doesn’t anticipate any problems with Brainard.
  • “I feel positive at this moment,” the senator said.
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