Republicans are signaling that they will help bail out Jerome Powell if he's renominated to lead the Federal Reserve amid opposition and skepticism from progressives.
The burgeoning fight over who will lead the nation’s central bank comes as Powell’s four-year term runs out in February. Fed watchers anticipate President Biden
Joe BidenManchin lays down demands for child tax credit: report Abrams targets Black churchgoers during campaign stops for McAuliffe in Virginia Pentagon, State Department square off on Afghanistan accountability MORE could make an announcement in late October or November in order to set up an early 2022 confirmation vote for another four-year term.
Powell has strong backers, including Treasury Secretary Janet Yellen
Janet Louise YellenDemocrats face growing storm over IRS reporting provision Hoyer signals House vote on bill to 'remove' debt limit threat Biden's IRS proposal could mark the end of privacy in banking MORE. But he’s facing a curveball in the form of a stock trading scandal that has poured fuel on calls from progressives for Biden to shake up the culture at the Federal Reserve by changing its top leadership.
GOP senators, in part driven by concern that a Powell replacement would be more liberal, are making it clear they will help put up the voters to confirm him to a second term.
“Most of the people I’ve talked to on the Republican side support his renomination. I can’t think of one person who opposes him,” said Sen. John Kennedy
John Neely KennedyMORE (R-La.).
Sen. Chuck Grassley
Chuck GrassleyFill the Eastern District of Virginia On The Money — Progressives play hard ball on Biden budget plan Hillicon Valley — Presented by LookingGlass — Congress makes technology policy moves MORE (R-Iowa) said he would support Powell and that he thought there would be enough GOP votes to overcome any Democratic defectors.
“The reason I would support him — it isn’t because I agree with the way he’s handled the inflation issue,” Grassley said, “but the alternative would be much worse.”
Though nominations only require a simple majority to get confirmed by the Senate, Powell will need help from Republicans as there are likely to be Democratic defections in the evenly split chamber.
Powell will face at least one Democratic “no” vote in the Senate Banking Committee after Sen. Elizabeth Warren
Elizabeth WarrenMisguided recusal rules lock valuable leaders out of the Pentagon Biden's soft touch with Manchin, Sinema frustrates Democrats Hillicon Valley — Presented by LookingGlass — Congress makes technology policy moves MORE (D-Mass.), who opposed Powell’s nomination in 2018, became the first Democratic senator to come out against him.
“Renominating you is gambling the next five years of a Republican majority on the Fed board and a Republican chair who has regularly voted to deregulate Wall Street won't drive this economy off a financial cliff again,” Warren said, referring to the 2007-08 financial crisis.
Sen. Jon Tester
Jonathan (Jon) TesterSenate to vote next week on Freedom to Vote Act Democrats struggle to gain steam on Biden spending plan The Hill's 12:30 Report: Debt ceiling fight punted to December MORE (D-Mont.), another Democrat on the committee, has said that he’ll support Powell, touting his ability to maintain the “independence” of the Federal Reserve. But other Democratic senators, including Banking Committee Chairman Sherrod Brown
Sherrod Campbell BrownBuilding back better by investing in workers and communities US on track to miss debt payments as soon as Oct. 19: analysis On The Money — Presented by NRHC — Democrats cross the debt ceiling Rubicon MORE (D-Ohio), haven’t tipped their hand yet on if they will support Powell.
The Banking Committee is evenly split between Republicans and Democrats, meaning Powell will need GOP votes given Warren’s opposition and could need additional help if other Democrats on the panel come out against him.
More than half of the GOP senators on the panel have said that they would support Powell, giving him a potentially comfortable margin to work with.
“I’ve disagreed with him before ... but as much as any person on God’s green earth, Jay Powell held together the world economic system after the shutdown and he had to do it with bailing wire and duct tape and spit,” said Kennedy.
Sen. Mike Rounds
Mike RoundsThe Hill's Morning Report - Presented by Facebook - After high drama, Senate lifts debt limit Schumer frustrates GOP, Manchin with fiery debt ceiling speech Here are the 11 GOP senators who helped advance the debt extension MORE (R-S.D.), another member of the Banking Committee, added that he thinks Powell has “done a very good job under very trying times.”
“I would be very comfortable with him having an additional term,” Rounds said.
In addition to Kennedy and Rounds, GOP Sens. Thom Tillis
Thomas (Thom) Roland TillisGOP rallies around Manchin, Sinema Advocates frustrated by shrinking legal migration under Biden Key debt-limit vote sparks major fight among Senate Republicans MORE (N.C.), Steve Daines
Steven (Steve) David DainesSenate GOP seeks bipartisan panel to investigate Afghanistan withdrawal Warren, Daines introduce bill honoring 13 killed in Kabul attack Daines to introduce bill awarding Congressional Gold Medal to troops killed in Afghanistan MORE (Mont.), Mike Crapo
Michael (Mike) Dean CrapoYellen confident of minimum global corporate tax passage in Congress 136 countries agree to deal on global minimum tax Biden sidesteps GOP on judicial vacancies, for now MORE (Idaho), Jerry Moran
Gerald (Jerry) MoranStar gymnasts call on Congress to dissolve US Olympics board Expats plead with US to deliver COVID-19 vaccines Biden sidesteps GOP on judicial vacancies, for now MORE (Kan.) and Kevin Cramer
Kevin John CramerLobbying world The Hill's Morning Report - Presented by Facebook - After high drama, Senate lifts debt limit GOP tries to take filibuster pressure off Manchin, Sinema MORE (N.D.) are each on the Banking Committee and have indicated that they would support Powell if he’s renominated.
Powell is also expected to need GOP help to get confirmed on the floor. Though Warren is the only Democratic senator, for now, that has said she will oppose Powell, he’s sparked opposition from progressives, who are urging Biden to select someone else.
Part of the headache for Powell stems from the independent actions of two presidents of Fed reserve banks and Fed Vice Chairman Richard Clarida, all of whom conducted financial trades approved by ethics officials in early 2020.
The Federal Reserve's internal watchdog will review the financial transactions amid growing backlash over how the officials managed their portfolios amid the pandemic. The Office of Inspector General, the bank’s independent ethics investigator, will determine if the moves were in line with internal ethics rules and federal law.
Warren, who had already announced she wouldn’t support Powell, doubled down on her criticism in the wake of the news, claiming that it showed Powell had “failed as a leader.”
But while the scandal has revived questions among progressives about giving Powell another term, their concerns run deeper.
Democrats have praised Powell for boosting the Fed’s focus on maximizing employment, standing up to former President Trump
Donald TrumpRobert Gates says 'extreme polarization' is the greatest threat to US democracy Cassidy says he won't vote for Trump if he runs in 2024 Schiff says holding Bannon in criminal contempt 'a way of getting people's attention' MORE’s constant attacks and leading efforts to stabilize the market throughout the pandemic.
But the party is divided over whether Powell’s employment-driven approach to monetary policy is worth the cost of future regulatory rollbacks. Brown has urged Powell to stop deregulation until Biden names his Federal Reserve picks. He’s also earned frustration from climate hawks, including Sen. Sheldon Whitehouse
Sheldon WhitehouseThe Hill's Morning Report - Presented by Altria - Jan. 6 panel flexes its muscle Sen. Whitehouse blasts Alito speech: 'You have fouled your nest, not us' Breyer: Supreme Court 'fallible,' but has served US 'pretty well' MORE (D-R.I.).
Progressives are eager for Biden to put his own stamp on the Federal Reserve, including replacing Powell with someone more liberal. Up to four seats on the seven-person Fed board, including Powell’s, will likely be open by February.
They’ve rallied around Fed board member Lael Brainard as an ideal successor for Powell. She’s also been floated for the vice chair position if Biden renominates Powell to lead the Federal Reserve.
It’s not just progressives. Sen. Joe Manchin
Joe ManchinManchin lays down demands for child tax credit: report Democrats want to bolster working women, but face tortuous choices Buttigieg says delay in climate action will cost lives amid reports of Manchin roadblock MORE (D-W.Va.) urged Powell earlier this year to draw down economic stimulus over inflation concerns, and Sen. Bob Menendez
Robert (Bob) MenendezDemocrats weigh changes to drug pricing measure to win over moderates Advocates frustrated by shrinking legal migration under Biden Rand Paul blocks quick vote on House-passed B Iron Dome funding MORE (D-N.J.), another member of the Banking Committee, has questioned Powell about diversity at the Federal Reserve.
Powell could be at risk of losing additional Democratic votes on the Senate floor. He was confirmed as chairman in 2018 in an 84-13 vote, giving him a wide margin of approval. But nine of the 13 “no” votes were from Democrats.
Sens. Richard Blumenthal (D-Conn.), Cory Booker
Cory BookerDefense & National Security — Military starts giving guidance on COVID-19 vaccine refusals Senators preview bill to stop tech giants from prioritizing their own products Blinken pressed to fill empty post overseeing 'Havana syndrome' MORE (D-N.J.), Dianne Feinstein
Dianne Emiel FeinsteinJane Fonda to push for end to offshore oil drilling in California Overnight Health Care — Presented by The National Council on Mental Wellbeing — Merck asks FDA to authorize five-day COVID-19 treatment Bannon's subpoena snub sets up big decision for Biden DOJ MORE (D-Calif.), Ed Markey
Ed MarkeyBiden likely to tap Robert Califf to return as FDA head Biden faces pressure to pass infrastructure bills before climate summit Senate Democrat says Facebook offers 'crocodile tears about protecting children' MORE (D-Mass.), Jeff Merkley
Jeff MerkleySenate to vote next week on Freedom to Vote Act Democrats call on White House to explore sharing Moderna technology abroad Lawmakers introduce bill to limit data collection at border crossings MORE (D-Ore.), Warren and Bernie Sanders
Bernie SandersPressure grows for breakthrough in Biden agenda talks Sanders, Manchin escalate fight over .5T spending bill Sanders blames media for Americans not knowing details of Biden spending plan MORE (I- Vt.), as well as then-Sen. Kamala Harris
Kamala HarrisAbrams targets Black churchgoers during campaign stops for McAuliffe in Virginia Replace Kamala Harris with William Shatner to get kids excited about space exploration Republicans would need a promotion to be 'paper tigers' MORE (D-Calif.), voted against Powell in 2018.
Blumenthal has since indicated that he would support Powell if he’s nominated to a second term, but other previous Democratic "no" votes haven’t yet tipped their hand.
Powell could get confirmed to a second term despite opposition from some progressives as long as there is enough GOP support to keep him above 50 votes and Harris, now vice president, breaks a tie in his favor.
Some top Republicans are keeping their powder dry, citing concerns over inflation.
Asked if he could support Powell, Sen. John Thune
John Randolph ThuneGOP rallies around Manchin, Sinema McConnell gets GOP wake-up call Democrat on controversial Schumer speech: Timing 'may not have been the best' MORE (S.D.), the No. 2 Senate Republican, said he would “consider it” if Powell is renominated.
“I’m really worried about the Fed’s views on inflation particularly early on. They were really discounting it. So I’d want to think about it and maybe ask him some questions,” he said. “I know in one interaction I had with him when I asked about that they really downplayed it, and I think it’s a much more serious issue.”
Sen. Pat Toomey
Patrick (Pat) Joseph ToomeyBlack women look to build upon gains in coming elections Watch live: GOP senators present new infrastructure proposal Sasse rebuked by Nebraska Republican Party over impeachment vote MORE (Pa.), the top Republican on the Banking Committee, and Sen. Richard Shelby
Richard Craig ShelbyMcConnell gets GOP wake-up call The Hill's Morning Report - Presented by Facebook - After high drama, Senate lifts debt limit Here are the 11 GOP senators who helped advance the debt extension MORE (Ala.), the second-ranking Republican on the panel, haven’t said if they would support Powell.
“I supported him before. ... Wait and see if he’s nominated and go from there. We could do a lot worse,” Shelby said. “The inflation bothers me, and what he says about inflation bothers me.”
But Shelby added that there were some alternatives to Powell being “floated around” that would “scare a lot of people.”
Sylvan Lane contributed.
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