McConnell: Fed fight is a warning to Biden on radical nominees

Senate Minority Leader Mitch McConnell (R-Ky.) on Tuesday defended a Republican blockade of President Biden’s five nominees to the Federal Reserve as justified by the radical nature of the picks, in particular Biden’s choice of Sarah Bloom Raskin to serve as vice chair of supervision.  

Senate Republicans appeared to catch Democrats by surprise earlier in the day by announcing that they would deny the Senate Banking Committee a quorum at a business meeting in order to block a vote on Raskin. 

The Banking panel’s rules do not allow the committee to hold votes on any business without a quorum present.  

The power-sharing agreement negotiated between Senate Majority Leader Charles Schumer (D-N.Y.) and McConnell at the beginning of last year gave Democratic committee chairmen the power to discharge nominees out of committee in case of a tie vote. But it made no provision for discharging nominees from evenly divided committees if Republicans block votes by boycotting meetings and refusing to provide a quorum.  

Republicans on the Senate Judiciary Committee say it’s too soon to say whether they’ll consider using the same tactic to try to bottle up Biden’s expected Supreme Court nominee in committee.  

McConnell says this should serve as a warning to Biden to pick nominees closer to the political mainstream.  

“These are highly controversial nominees, extremely controversial, who heatedly expressed the view that the Fed should be involved in things that are not the Fed’s responsibility. The best way for this to stop is for the president to quit sending up these kinds of nominees,” he said.  

“We have to have the most responsible people at the Fed now, not the least responsible. The Fed has got a big job ahead of it in trying to tackle inflation, and I think there’s a lot skepticism that many of these nominees are not up to the job,” he added.  

Republicans are most concerned about Raskin, who has urged financial regulators to use their tools to respond to risks posed by climate change, which Sen. Pat Toomey (Pa.), the ranking Republican on the Banking Committee, and other Banking Republicans say is well outside the Fed’s mandate. 

Republicans have also voiced concerns about Biden’s other picks, including Lael Brainard, whom Biden nominated to serve as vice chairman of the Fed, and Lisa DeNell Cook, whom Biden nominated to serve on the board of governors.  

Toomey on Tuesday afternoon said he suggested to Banking Committee Chairman Sherrod Brown (D-Ohio) that he would allow votes on all of the nominees except for Raskin, who has come under scrutiny from Republicans for her role in helping Reserve Trust, a Colorado-based trust company, receive a Fed master account while she served on the board of directors of that company.  

Reserve Trust is the only state-chartered trust that has coveted access to the Fed’s payments system.  

“The reason we’re not providing a quorum is because we can’t get straight answers to simple questions,” he said, citing the Fed’s reversal on its initial decision not to give Reserve Trust a Fed master account after Raskin contacted the Kansas City Fed.  

“We’ve simply asked questions about how and why the Fed made a 180-degree reversal, what role did Sarah Raskin play in that, and we’re getting stonewalled,” he said.