Exclusive: Senate Banking Committee to take action on embattled Fed nominee Judy Shelton next week

Exclusive: Senate Banking Committee to take action on embattled Fed nominee Judy Shelton next week
© Greg Nash

The Senate Banking Committee is expected to mark up Judy Shelton’s nomination to the Federal Reserve next Tuesday, a signal she is expected to pass the panel along with Christopher Waller, another Fed nominee.

Shelton, whose nomination has run into Senate GOP opposition because of her unorthodox views, has been held up for weeks because of skepticism from Sens. John KennedyJohn Neely KennedyMORE (R-La.) and Richard ShelbyRichard Craig ShelbyFights over police reform, COVID-19 delay Senate appropriations markups Trump's push for major infrastructure bill faces GOP opposition Watchdogs express concern to lawmakers about ability to oversee coronavirus relief funds MORE (R-Ala.), two members of the Banking Committee.

Senate Banking Committee Chairman Mike CrapoMichael (Mike) Dean CrapoGOP skeptical of polling on Trump GOP: Trump needs a new plan On The Money: US tops 100,000 coronavirus deaths with no end in sight | How lawmaker ties helped shape Fed chairman's COVID-19 response | Tenants fear mass evictions MORE’s (R-Idaho) expected notice of a markup for Shelton and Waller next week is a sign they have the votes to pass the committee, which has 13 Republican members and 12 Democrats.

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Shelton’s and Waller’s markups are expected to take place in executive session and precede a hearing for Dana Wade, President TrumpDonald John TrumpHouse panel approves 0.5B defense policy bill House panel votes against curtailing Insurrection Act powers after heated debate House panel votes to constrain Afghan drawdown, ask for assessment on 'incentives' to attack US troops MORE’s nominee to serve as the Department of Housing and Urban Development’s assistant secretary for housing and federal housing commissioner, and Brian Miller to serve as special inspector general for pandemic recovery.

Trump nominated Wade and Miller in February and April, respectively.

Kennedy was undecided for weeks over how to vote on Shelton, who came under fire for her past support of returning to the gold standard, something that was abandoned in 1971.

A return to the gold standard would play havoc with the Federal Reserve’s balance sheet, which has swelled to more than $6 trillion because of the coronavirus crisis.

Shelton has since backed off her advocacy for returning to the gold standard, telling the Banking Committee in February, “I would not advocate for going back to a prior historical monetary arrangement” and saying Congress has the ultimate authority to “regulate the value of U.S. money.”

Kennedy said he wanted to read more of Shelton's writings before making a decision. Shelby said he would oppose her if another Republican did but pledged not to act on his own to block the nominee.

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Sen. Pat ToomeyPatrick (Pat) Joseph ToomeyGOP senators push for quick, partial reopening of economy NSA improperly collected US phone records in October, new documents show Overnight Defense: Pick for South Korean envoy splits with Trump on nuclear threat | McCain blasts move to suspend Korean military exercises | White House defends Trump salute of North Korean general MORE (R-Pa.) was also skeptical of Shelton’s nomination but promised in February to vote for her after she pledged to oppose using monetary policy to devalue the dollar.

Shelton wrote to Toomey in a Feb. 25 letter that “statutory decree,” instead of the Fed, “defines the structure, responsibilities, and aims of the U.S. central banking system” and that the central bank does not have authority “to use monetary policy for the purpose of devaluing the dollar.”

Toomey voiced discomfort with Shelton’s views during a Feb. 13 hearing.

“That’s a very, very dangerous path to go down. This beggar-thy-neighbor mutual currency devaluation is not in our interest, and it is not in the mandate of the Fed to pursue it,” he said during Shelton’s confirmation hearing.

Shelton’s biggest backer in the Trump administration is National Economic Council Director Larry KudlowLawrence (Larry) Alan KudlowMORE, according Senate sources familiar with the behind-the-scenes wrangling over her nomination.

A spokeswoman for the Banking Committee declined to comment on the markup before it is publicly announced.

"All hearings and markups are publicly announced when they are scheduled," Amanda Critchfield said.

A spokesperson for Kennedy did not immediately respond to a request for comment.

Updated at 11:15 a.m.