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**FEBRUARY 9, 2022**

Kuttner on TAP

Are Biden's Fed Nominees in Trouble?

They will all probably be confirmed, but first Sen. Ben Ray Luján needs
to recover to get the Dems back to 50 votes.

Five nominees to the Fed Board of Governors are pending (out of seven),
giving President Biden the chance to make over America's central bank.
The most progressive, Sarah Bloom Raskin, will probably just squeak
through, assuming the Senate Democrats get back to full strength.

Raskin has been nominated to the crucial post of vice chair for
supervision. At the hearing

of nominees Lisa Cook, Philip Jefferson, and Raskin last Thursday, the
Republican knives were particularly out for Raskin.

Republican senators attacked her published writings urging the Fed to
pay a lot more attention to the climate risks banks are incurring in
their loan portfolios. But that is an entirely legitimate concern, one
that Fed Chair Jay Powell has expressed in milder form.

The real anxiety is that Raskin, who previously served as deputy
Treasury secretary and as a Fed governor during the Obama years, will be
a tough and savvy regulator across the board. Senate Republican leader
Mitch McConnell, following the hearing, singled out Raskin for attack in
a floor speech.

There are reports that Republicans may try to separate Raskin from the
other four Fed nominees as the price of letting the others get early
confirmation. The clock is ticking, and the Fed will have a crucial vote
on raising interest rates in March.

But the office of Senate Banking Committee Chair Sherrod Brown confirms
to me that his committee will report out all five nominees next
Wednesday as a group, and not allow them to be separated. My reporting
suggests that none of the five centrist Democratic senators who sank the
nomination of the progressive Saule Omarova to be comptroller of the
currency are inclined to oppose Raskin.

Some Republicans were hoping that an alleged conflict of interest would
sink Raskin. While out of government, she served on the board of a
Colorado-based non-bank financial company, Reserve Trust, which was
given direct access to the Fed's payment system. When she left the
company, she cashed out stock worth more than $1 million. Republican
senators claimed that the company got favorable treatment after Raskin
supposedly intervened with its regulator, the Federal Reserve Bank of
Kansas City. However, the K.C. Bank, far from a shill for Biden or
Raskin, has now thoroughly debunked

that allegation, explaining how that access to the Fed system was a
routine decision.

Meanwhile, Sen Luján's office says the senator has been sitting up
and speaking with his staff, and has no signs of aftereffects of his
stroke. Let's hope so.

It would have been far better for Biden to have delayed redesignating
Republican Jay Powell as Fed chair until his other nominees were
confirmed. But all five are now being treated as a group. That needs to
include Sarah Bloom Raskin.

****

~ ROBERT KUTTNER

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**Robert Kuttner's latest book is**

The Stakes: 2020 and the Survival of American Democracy
.

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