Senate Republicans are gearing up to prevent the confirmation of President Biden’s choice for vice chairwoman of the Federal Reserve Board of Governors.
Progressives have been pressuring Biden to select Lael Brainard — who served as Under Secretary of the Treasury for International Affairs during the Obama administration and is currently a member of the Fed’s Board of Governors — as the next chair of the Federal Reserve. In what appears to be a compromise, Biden instead tapped current Fed Chair Jerome Powell for a second term, while elevating Brainard to vice chairwoman.
Conservative lawmakers, however, are nevertheless planning to combat Brainard’s “heavier regulatory hand,” explained a report from Fox Business:
According to sources familiar with the plan, Republicans will focus on raising concerns that Brainard may try to expand the Federal Reserve’s narrow purview to include action on progressive policies if appointed to the number two post.
Aides say they plan to hone in on Brainard’s advocacy surrounding climate change and what Republicans are calling “woke” activism. One sticking point is fears that Brainard could advance progressives’ goal of using regulatory tools to force banks to stop lending to fossil fuel companies after she said the Fed should “assess the resilience of individual financial institutions and the financial system to” climate risks…
Another area of concern comes after Brainard signaled support for using a central bank digital currency to create retail bank accounts at the Federal Reserve for Americans. Critics say that proposal would give the central bank too much control over personal finances and politicize the independent institution.
“She has been an advocate for a heavier regulatory hand than I think is appropriate,” Senate Banking, Housing, and Urban Affairs Committee Ranking Member Pat Toomey (R-PA) told the outlet last month. “She’s also encouraged the Fed to what is, in my view, stray out of its really narrow mandate requirement and venture into areas like social justice and climate issues that I don’t think are the proper purview of the Fed.”
Brainard is not the only progressive favorite being considered by Democrats for a key policymaking slot at the nation’s central bank.
According to a CNBC report, Sen. Sherrod Brown (D-OH) has “spoken to the Biden administration” about choosing Richard Cordray— a longtime ally of Sen. Elizabeth Warren (D-MA) — as the Fed’s vice chair for supervision. The Wall Street Journal describes the position as “the government’s most influential overseer of the U.S. banking system.”
Should he be nominated, Republican lawmakers are likely preparing to expose Cordray’s left-wing leanings.
“Richard Cordray’s disastrous and divisive tenure at the CFPB raises serious questions about how he might undermine the Fed’s independence and nonpartisan reputation,” Toomey told Axios. “This is the individual who helped Elizabeth Warren stand up an agency so unaccountable the Supreme Court took away its independent status. I’d hope the White House considers less divisive figures for this role.”
Or, in the more succinct words of Sen. John Kennedy (R-LA), as recorded by The Wall Street Journal: “I like Richard. I respect Richard. Richard is to the left of Lenin.”