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WASHINGTON — Republicans are blocking votes on President Joe Biden’s five nominees for the Federal Reserve Board, infuriating the White House and creating an impasse when the central bank is under increasing pressure to combat inflation.
The GOP’s boycott during a Senate Banking Committee hearing this week stalled the nominations of Jerome Powell for a second term as Fed chair and Lael Brainard as vice chair.
But the holdup primarily targets Sarah Bloom Raskin, Biden’s nominee to be vice chair for supervision. Republicans say she has given incomplete answers about whether she used her government contacts from her time in top posts at the Fed and the Treasury Department during the Obama administration to aid Reserve Trust, a private Colorado payments firm.
Raskin was on the board of Reserve Trust in 2017 when the Kansas City Fed denied the company access to the central bank’s payments systems; Reserve Trust gained access the following year.
Sen. Pat Toomey of Pennsylvania, the top Republican on the Banking Committee, who led this week’s GOP walkout, said his colleagues were still awaiting answers from the Kansas City Fed about Raskin.
“We want clarity about what happened,” Toomey told reporters Wednesday. “It doesn’t have to be that I agree with what happened, but I want to understand what happened, and that’s a requirement.”
White House press secretary Jen Psaki blasted the boycott as “a very extreme step that’s totally irresponsible.”
“It’s never been more important to have confirmed leadership at the Fed to help continue our recovery and fight inflation,” she told reporters, defending Raskin as “one of the most qualified” Fed nominees ever. “Senator Toomey has continued to promote false allegations that have already been shot down by ethics experts, the Kansas City Fed, the founder of Reserve Trust and Sarah Bloom Raskin herself.”
Raskin is married to Rep. Jamie Raskin, D-Md., who has served in the House since 2017.
Sen. Sherrod Brown, D-Ohio, the chair of the Banking Committee, said the refusal to hold a vote shows “Republicans are AWOL on inflation,” even as they seek to weaponize the issue politically heading into the midterm elections.
“They can vote however they want,” he said, “but they’ve got to do their jobs, period.”
Brown said Raskin responded to 189 questions — most of them from Toomey — in 48 hours, in addition to answering questions from Sen. Tim Scott, R-S.C., going beyond what’s required of a nominee. Brown, who said he spoke to Raskin on Tuesday night, added that she has responded to the queries “in good faith,” while noting that in some cases she doesn’t recall every detail from events that happened five or even 10 years ago.
“If Toomey gets his way on this, it’s the way they will stop nominee after nominee after nominee. ‘Sorry, they didn’t answer right, so we’re not going to show up and provide a quorum.’ You can’t govern that way,” Brown said.
Brown warned that if Republicans are allowed to block nominees in such a manner, they could extend the tactic to Biden’s eventual Supreme Court nominee.
“I think this could set a precedent that could lead to that,” he said.
Senate rules adopted in February 2021 specify that a majority of committee members must be present to conduct business. Because the panels are split evenly between each party in the 50-50 chamber, at least one Republican must be present to proceed with committee action like votes on nominees.
The hardball tactic is the latest example of the Senate GOP caucus’ continual testing of the limits of its power to block the narrow Democratic majority from advancing its priorities. Republicans used a similar committee boycott months ago to prevent a vote on Dilawar Syed, Biden’s nominee to be deputy administrator of the Small Business Administration. His nomination is still pending.
Sen. Chris Van Hollen, D-Md., predicted that Raskin and the other Fed nominees will ultimately be confirmed and that “it’s a question of when.”
“We’re going to explore all our options. The easiest way to address this is for Republicans to … show up to vote,” said Van Hollen, a member of the Banking Committee. “Their position is unsustainable. The Fed needs a full contingent. It is totally hypocritical to argue that the Fed should be doing more when it comes to inflation and then refuse to allow a vote on Fed nominees.”
The rate of inflation has risen rapidly in recent months, hitting a 40-year high of 7.5 percent for January, according to data the Bureau of Labor Statistics released last week. Senate Democrats have been focusing on new measures to tackle price increases, such as proposing a gas tax holiday and calling for cost-cutting measures like letting Medicare negotiate drug prices.
Asked whether he’s open to changing the rules to overcome a GOP boycott, Sen. Joe Manchin, D-W.Va., said Wednesday: “I’m open to all the rules changes that make the place work more effectively and efficiently. So we’re talking about all types of rule changes.”
Changing the rules normally requires 67 votes, but using the so-called nuclear option takes only 50 votes. Manchin has so far opposed using the 50-vote option to limit minority power, and Democrats on the Banking Committee aren’t holding their breath.
“Right now, our principal tool is to talk quite publicly about how the Republicans are putting our economy at risk by keeping the Fed understaffed,” said Sen. Elizabeth Warren, D-Mass.
Sen. Raphael Warnock, D-Ga., a Baptist pastor, talked about the human cost to the GOP’s tactics.
“I see the human face of the political games that people play every Sunday when I return home to preach from my pulpit, as people are dealing with rising costs and the aftershocks of this pandemic,” Warnock said in an interview. “We need the Fed to have full access to all of its necessary tools so that we can continue to move forward.”
Sen. Cynthia Lummis, R-Wyo., suggested that the Senate advance four of the five Fed nominees and “get more information from the other.”
“If this is an all-or-nothing proposition in order to advance all of them at once, all we have to do is wait until we have the information that Senator Toomey has requested,” she said. “So there is a way out of this.”
The White House dismissed suggestions that the Senate advance four picks and hold off on Raskin.
“We are working with Chairman Brown to move all five nominees forward,” Psaki said.
Sahil Kapur is a senior national political reporter for NBC News.
Scott Wong is a senior congressional reporter for NBC News.
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GOP blockade puts Biden’s Fed nominees in limbo, sparking Democratic fury – NBC News